Sugar Stocks Surge as Centre Clears 1.5 MT Export Quota; Balrampur Chini, Renuka Lead Rally

Mumbai | November 10

Shares of leading sugar companies rose sharply on Monday after the Union Government approved the export of 1.5 million tonnes of sugar for the 2025–26 season, alongside the removal of the 50% export duty on molasses. The policy decision boosted market sentiment by addressing surplus supply and improving earnings visibility for sugar mills.

The announcement was confirmed by Union Food Minister Pralhad Joshi in a written communication to Karnataka Chief Minister Siddaramaiah. Joshi said the move balances farmer payment stability, inventory management, and domestic supply security.

“For the current sugar season, the central government has decided to allow the export of 15 lakh tonnes of sugar, and the 50% export duty on molasses has been removed,” Food Minister Pralhad Joshi stated.

Market Reaction: Balrampur Chini, Renuka and Dalmia Bharat Gain

Sugar counters strengthened in early trade, with Balrampur Chini Mills, Shree Renuka Sugars, Dalmia Bharat Sugar, Dhampur Sugar, and Triveni Engineering among the key gainers. Traders said the export clarity reduces inventory pressure and supports pricing stability, especially after two quarters of uncertainty linked to ethanol diversion volumes. Early buying was led by institutional flows, followed by broader retail participation.

Why the Export Permission Matters

The decision comes as mills began the season with larger-than-expected sugar stocks. The government had projected 4.5 million tonnes of sugar would be diverted for ethanol production in 2024–25, but only around 3.4 million tonnes were diverted, leaving more sugar in the domestic system.

Last month, Food Secretary Sanjeev Chopra signalled the Centre was evaluating export options due to the inventory build-up and weaker-than-expected ethanol conversion numbers. Allowing limited exports now is expected to restore balance between production, demand and stock levels.

Production Outlook Strong for 2025–26

Industry projections indicate comfortable supply through the season. The Indian Sugar & Bio-Energy Manufacturers Association (ISMA) has estimated gross production at around 343.5 lakh tonnes for 2025–26, up from 296.1 lakh tonnes last year. After accounting for ethanol diversion, net availability remains above domestic consumption requirements of about 285 lakh tonnes. The increase is mainly due to higher cane output in Maharashtra, supported by improved acreage and productivity.

Industry Sought Higher Quota, But More May Follow

The industry had requested a 2 million tonne export allocation, but the government has opted for a controlled first phase. Analysts believe the quota could be revised later in the season, depending on actual output and ethanol blending progress.

For now, the policy update improves realisation confidence for mills, supports integrated producers due to the molasses duty removal, and allows smoother cane payment cycles. Market attention will now turn to export execution pace, domestic pricing trends, and updates to the ethanol blending roadmap. If production stays in line with estimates, further export flexibility remains possible later in the year.