Finance Desk – Sugar stocks rallied sharply in early trade on Tuesday, with some surging as much as 20%, after the government removed restrictions on ethanol production.
Under the new rules for the Ethanol Supply Year 2025-26, sugar mills and distilleries can now produce ethanol from sugarcane juice, sugar syrup, B-heavy molasses, and C-heavy molasses without any limits. This move is part of the government’s push to promote ethanol blending in fuel while ensuring there’s enough sugar available for domestic consumption.
Rajshree Sugars & Chemicals led the rally, jumping the most, followed by Shree Renuka Sugars and Dhampur Sugar Mills, both rising over 11.5%. Other gainers in the sector included Sakthi Sugars, Dwarikesh Sugar, Ugar Sugar, Uttam Sugar, Rana Sugars, Bajaj Hindustan Sugar, Mawana Sugars, Avadh Sugar & Energy, and Balrampur Chini Mills.
The Department of Food and Public Distribution, along with the Ministry of Petroleum and Natural Gas, will regularly review how much sugar is being diverted for ethanol production to make sure domestic supply remains steady.
Last year, the government had restricted ethanol production from sugarcane juice or syrup, allowing only B-heavy molasses to be used, due to lower sugar output in the 2023-24 season.
