Share prices of sugar companies rise due to indications of a sharp decline in production

20-Mar-2025 12:25 PM

Sugar Company Stocks Surge Amid Production Decline Concerns

Key Highlights

  • Estimated Sugar Production Decline:

    • 2024-25 season: 260-265 lakh tonnes.
    • 2023-24 season: 319-320 lakh tonnes.
    • Shortfall: Around 60 lakh tonnes.

  • Industry Projections:

    • ISMA Estimate: 264 lakh tonnes (238 lakh tonnes produced by mid-March).
    • Cooperative Sugar Federation: 259 lakh tonnes.

  • Stockpile Impact:

    • Surplus stock may shrink from 79 lakh tonnes to 44-54 lakh tonnes.
    • Domestic consumption: 280-290 lakh tonnes.
    • Exports: 10 lakh tonnes expected.

Market & Financial Implications

  • Sugar prices likely to stay high due to supply constraints.
  • Sugar company stocks rising, with potential for further gains.
  • Peak industrial demand from April to August could boost company profits.
  • Higher dividends expected for major sugar firms.

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