Dwarikesh Sugar, Balrampur Chini Mills and other sugar stocks rally up to 6% intraday; here’s why

Leading sugar stocks advanced 1-6% in trade on Tuesday, January 21, after the Union government allowed sugar exports for the current season.

The Centre on Monday allowed the export of 10 lakh metric tonnes of sugar during the 2024-25 season that spans from October 2024 to September 2025.

In a post on social media platform X, Union Minister for Consumer Affairs, Food and Public Distribution Pralhad Joshi said the measure will benefit 50 million farmer families and 500,000 workers. He added that it will also boost the liquidity of sugar mills, ensuring timely payment of cane dues and balancing availability and prices for consumers.

However, by 11 am, most of these sugar stocks pared their early-morning gains on account of the decline in broader equity markets and were trading in the negative zone, except Dhampur Sugar and Dwarikesh Industries.

According to reports, the government’s approval for sugar exports for the current season has come after consistent requests from the sugar industry in hopes that exports would arrest the recent decline in sugar prices and would also take care of the domestic surplus.

Market experts say that the government’s move is expected to achieve favourable realisations for sugar companies due to the added benefit of the rupee's depreciation against the dollar. The decision will thereby aid in the timely clearance of cane dues by sugar mills.

However, some traders are surprised by the development as this year’s sugar production is expected to fall below consumption for the first time in eight years. India’s sugar production in the current sugar season is estimated to be 27 million tonnes in 2024-25, a decline from 32 million tonnes last year.