Sugar Stocks Rally Up to 7% as Domestic Prices Hit 7-Year High

Shares of sugar companies, including Balrampur Chini Mills, Ugar Sugar Works, Dhampur Sugar, Dalmia Bharat Sugar, Shree Renuka Sugars and EID Parry, surged by up to 7% as domestic sugar prices climbed to ₹4,400–₹4,800 per quintal, their highest level in seven years. The rally was supported by a sharp rise in global sugar prices amid growing concerns over supplies. US raw sugar prices crossed the $15-per-pound mark and touched $16, while London white sugar prices climbed to a 15-month high of over $500 per tonne. Weaker production expectations in Brazil, higher ethanol blending, adverse weather conditions and lower output estimates for India and Thailand have raised concerns about global availability. In Europe, sugar production is also expected to fall to its lowest level in more than a decade after extreme heat damaged an already smaller sugar beet crop. The threat of El Niño-related weather disruptions could further affect cane production in key Asian producers such as India and Thailand. Sugar production in the European Union and the UK is expected to decline to around 15 million tonnes, marking the lowest level since the 2015 season. Repeated heat waves over the summer have damaged crop yields, while cultivated acreage has fallen for a second consecutive year. Farmers reduced planting after bumper harvests in previous seasons pushed sugar prices lower. The deteriorating production outlook has increased concerns about a potential global sugar deficit. London white sugar futures recently hit a one-year intraday high, while New York raw sugar prices are poised to rise by more than 7% this week, reflecting growing fears over tightening global supplies.