Sugar stocks in sweet spot; surge 20% on hike in ethanol price

At 11:10 am, shares of Dhampur Sugar Mills, Avadh Sugar and Dwarikesh Sugar were trading 20 per cent higher each at Rs 140.45, Rs 567.15 and Rs 29.55, respectively.

Shares of sugar companies climbed as much as 20 per cent in the intraday trade on Monday. Sugar stocks have been on a rising spree ever since the government approved an over 25 per cent hike in the price of ethanol produced directly from sugarcane juice for blending in petrol in a bid to cut surplus sugar production and reduce oil imports.

The Cabinet Committee on Economic Affairs (CCEA) last week raised the procurement price of ethanol derived from 100 per cent sugarcane juice to Rs 59.13 per litre from the current rate of Rs 47.13. 

The price