By Aditya Raghunath
Investing.com — Sugar stocks have seen a massive uptick in prices in the last 3-4 trading sessions. Shares of sugar companies zoomed 10-20% yesterday.
Dwarikesh Sugar Industries Ltd (NS:) has gained over 31% from its closing price of Rs 26.85 on February 22 to Rs 35.2 on March 3. Triveni Engineering and Industries Ltd (NS:) has gained over 28% from February 22 to close at Rs 94.15 on March 3. Bajaj Hindustan Ltd. (NS:) has moved up almost 23% from Rs 6.25 on March 1 to Rs 7.8 on March 3. Shree Renuka Sugars Ltd. (NS:) gained 10% yesterday to close at Rs 11.35.
The reason for this rally is the global rise in sugar prices thanks to a shortage of supply in Brazil, the world’s top sugar producer. India’s sugar producers have been under pressure in the last few years as there has always been excess inventory and surplus production. However, this year, there is a lower-than-anticipated sugar surplus that combined with rising international prices has led to sugar stocks going up.
A Bloomberg report also said India will ship almost 20% less than the government’s target for the year that ends in September. It is likely that India’s exports will only be 4.9 million tons compared to the government’s target of 6 million tons. Shipments have started late and there are several logistical problems, according to Bloomberg.