Sugar Stocks Rally: Dalmia Bharat, Shree Renuka Sugar Surged Up to 7% on Additional Export Quota Approval

Government Approves 87,587 Tonnes of Additional Exports

The food ministry granted the additional export quota after mills applied for allocations from the previously announced 500,000 tonnes extra quota in February. However, only 87,587 tonnes were requested and subsequently approved, with the remaining quantity lapsing.

Earlier, the government had already permitted exports of 1.5 million tonnes for the ongoing season. With this incremental approval, mills now have limited but meaningful additional room to export surplus sugar, helping balance domestic supply.

Stock Price Movement Across Sugar Companies

Following the announcement, several sugar stocks witnessed notable gains in early trade. Dalmia Bharat Sugar rose 4.45%, while Uttam Sugar Mills gained 4.1% and Avadh Sugar & Energy climbed 3.47%. Meanwhile, Bajaj Hindusthan Sugar, Shree Renuka Sugars, and Balrampur Chini Mills advanced between 1.4% and 2.3%.

Export Deadline and Compliance Conditions

Mills have been directed to complete exports by June 30, 2026. Those exporting at least 70% of their allocated quota by this deadline will be allowed to ship the remaining quantity by September 30, 2026. However, failure to meet the 70% threshold will result in the unutilised portion lapsing, with the possibility of reallocation to better-performing mills.

Additionally, mills that fall short of the 70% export requirement will face penalties in the form of reduced future quotas. For example, a mill allocated 1,000 tonnes but exporting only 400 tonnes by June 30 would see a deduction of 300 tonnes from its next allocation.

Strict Rules on Quota Usage and Eligibility

The government has made it clear that the export quota cannot be swapped between mills, and no extensions will be granted except in force majeure cases. Mills that violated stockholding limits under the March 2025 order are not eligible for export quotas this season.

All grades of sugar can be exported within the allocated limit. Refineries exporting refined sugar from raw sugar supplied by mills are permitted under bi- or tri-partite agreements, provided quantities remain within the original mill’s quota. Supplies to special economic zone refineries will also be treated as exports.

Mills are required to report monthly export data via the NSWS portal, and any violations could invite action under the Essential Commodities Act, 1955 and the Foreign Trade (Development and Regulation) Act, 1992.

Export Progress and Industry Context

As per industry data, India exported 315,000 tonnes of sugar between October and February in the 2025-26 season, against the total permitted quota of 1.5 million tonnes. The additional quota is expected to help mills offload surplus inventory and support domestic sugar prices in a tightly regulated sector.

Rising Sugar Prices and Global Factors

Sugar prices have been trending higher recently, supported by rising crude oil prices. Elevated oil prices increase the likelihood of countries like Brazil diverting more sugarcane towards ethanol production instead of sugar, tightening global supply.

This dynamic is seen as positive for Indian sugar companies, as higher global sugar prices improve realisations. A sustained rise in oil prices could further accelerate ethanol blending, reduce sugar output, and support the profitability of sugar mills going forward.

Outlook for Sugar Stocks

The approval of additional export quotas, combined with improving global price dynamics, has strengthened sentiment around sugar stocks. While the quantum of the latest quota is relatively small at 87,587 tonnes, it signals continued policy support for the sector, which remains crucial for managing surplus production and stabilising prices.