Sugar stocks climb on Oil Minister Hardeep Puri's '20% ethanol blending' commitment

Sugar stocks rose in the trading session on Wednesday, June 12, a day after Oil and Petroleum Minister Hardeep Singh Puri reiterated the government's commitment to achieve 20% ethanol blending by 2025.

Ethanol blending refers to the blending of petrol with ethyl alcohol derived from agricultural products, primarily sugarcane. "In the month of May only, we were able to cross 15% of ethanol blending," Puri said on Tuesday, when he took charge of the petroleum ministry. He also headed the ministry in the previous government.

“As you know, Prime Minister (Narendra Modi) had set a target originally of 20% blending by 2030. On the basis of what I have seen and in the basis of work in progress, I am reasonably confident that the 20% blending target, which was brought forward from 2030 to 2025, will be completed by the year 2025," Puri added.

Sugar stocks climb

Puri's reiteration of ethanol blending targets was expected to be cheered by companies engaged in sugar production, as it would increase their earnings from sugarcane molasses. The other main source of revenue is the sale of grain sugar in the wholesale and retail markets.

On Wednesday, stocks of sugar manufacturing companies significantly surged at the bourses.

Within the first couple of hours of trading, Balrampur Chini Mills jumped 2.94% to trade at ₹417.3 apiece on the NSE.

Avadh Sugar & Energy rose by 3.85% to trade at ₹611.45 per share, whereas DCM Shriram Industries jumped 3.56% to ₹222.98 apiece.

Dhampur Bio Organics recorded the sharpest jump of 10.44%, with the company's stock trading at ₹150.4.

Among other sugar stocks, KM Sugar Mills rose 3.11% to ₹42.09, Bannari Amman Sugars went up 1.24% to trade at ₹2,637.5, and Dhampur Sugar Mills climbed 2.6% to ₹240.32.