Sugar Stocks Rally Up to 9% as Global Sugar Prices Hit 18-Month High

A jump in global sugar prices sent Indian sugar mill shares sharply higher on Tuesday, with several stocks gaining more than 8% in a market that was otherwise rising more modestly.

Dhampur Sugar Mills climbed 8.56% to Rs 192 on the NSE and Sakthi Sugars rose 8.7% to Rs 19.35. Dalmia Bharat Sugar gained 8.5% to Rs 466.95, Dwarikesh Sugar Industries added 7.8% to Rs 47.59 and Shree Renuka Sugars rose 4.5% to Rs 22.84. Balrampur Chini Mills, Avadh Sugar & Energy, Bajaj Hindusthan Sugar and Uttam Sugar Mills were up 2-3%. The Nifty 50 was up about 0.7% at the time.

The global trigger

The rally started overseas. US sugar futures rose about 4% in a single session, and are up 14% over the past month and more than 23% over the past year. Raw sugar has reached its highest level in about 18 months.

Supply worries are behind the move. Heavy rain has slowed cane harvesting in Brazil, the world's largest exporter, and there are also concerns about crops in Europe and Thailand. Festive-season demand has added to expectations that global supply will be tight in the near term.

A tighter Indian balance sheet

The picture at home supports the trade too. Production for the 2025-26 season is now estimated at 30.6 million tonnes, well below the earlier forecast of 34.3 million tonnes, after pest attacks and waterlogging damaged crops. Mills are entering October with about 3 to 3.5 million tonnes of inventory against monthly consumption of about 2.2 million tonnes. That is tight, though not a shortage.

Crude oil also helps. With Brent holding above $100 a barrel, ethanol from the distilleries that most large mills now run has become more valuable, which supports earnings beyond sugar sales.

Why the upside may be limited

Not every analyst is convinced the rally will last. The government has already acted to cool domestic prices. It has allowed duty-free imports of 1 million tonnes until October 31, set stock limits for dealers and bulk buyers, issued fortnightly release quotas and moved the crushing season forward to around October 15. Some market watchers expect further curbs and think domestic prices are close to their peak.

The minimum selling price of sugar is another factor. It is still Rs 31 per kg, even though Maharashtra asked in August for an increase to Rs 41. Any revision would change the profit picture for mills. Fund managers have advised favouring companies with low debt, meaningful distillery capacity and steady cash generation over those riding short-term price moves.

For now, the sector is behaving like a commodity trade. It follows global futures more closely than the broader Indian market.

This is an original summary based on public reporting. See our editorial policy for how we source, write, and correct our stories.