Indian equity benchmark indices were seen trading with mild gains, but sugar stocks advanced sharply on September 2. Sugar stocks like Renuka Sugars, Rajshree Sugars, and others have rallied up to 20%.
In this article, we will understand why Sugar stocks are rallying on September 2, 2025.
In the current year, production has been capped due to lower cane availability. From November 1, the new ethanol supply year will begin, and mills and distilleries can produce ethanol without any quantitative ceiling, the Ministry of Consumer Affairs, Food & Public Distribution said.
For the ethanol season 2025-26, sugar mills and distilleries can produce ethanol from sugarcane juice, sugar syrup, B-heavy molasses (BHM), and C-heavy molasses (CHM) without any restrictions, according to a circular issued by the Department of Food and Public Distribution (DFPD).
The DFPD, together with the Ministry of Petroleum and Natural Gas (MoPNG), will monitor sugar allocations for ethanol production relative to overall sugar output, ensuring a steady supply of sugar for domestic needs throughout the year.
Previously, for the 2023-24 season, the government had prohibited sugar mills from using sugarcane juice or syrup for ethanol production, except B-heavy molasses, due to anticipated lower sugar output.
Separately, on September 1, the Supreme Court dismissed a plea challenging the rollout of 20% ethanol-blended petrol (EBP-20). The petitioner had argued that vehicles manufactured before April 2023—even BS-VI models—were not fully compatible with E20 fuel and requested ethanol-free petrol availability at fuel stations.
A bench led by Chief Justice BR Gavai, with Justice K Vinod Chandran, rejected the plea. Attorney General R Venkataramani opposed the challenge, stating that the matter had already been examined during policy formulation. He alleged the petitioner represented a larger lobby and stressed that the program supports farmers.
Balrampur Chini Mills share price was trading at ₹580.85, reflecting a strong positive move for the day with a rise of 7.24% compared to its previous close of ₹536.2 per share. The company is one of the largest integrated sugar companies in India.
Dhampur Sugar Mills share price is trading at ₹140.30, showing a robust gain of 11.51% from its previous close of ₹123.99, making it one of the sharpest movers in the sugar sector today.
Rajshree Sugar's share price has jumped up to 14% in the early trade on Tuesday following two key policy developments that boosted the outlook for ethanol demand in India. On the BSE, Rajshree Sugars & Chemicals led the gains, hitting its upper circuit at ₹45.36, up 20%.
Shree Renuka Sugars share price advanced 14% to ₹32.80. The company has the 4th largest sugar manufacturing capacity in India, and its flagship brand Madhur has a share of around one-third in the branded sugar market.
Avadh Sugar Energy share price climbed 10.5% to ₹467.05 per share. The company is a part of the K. K. Birla Group. Currently, the stock is trading at 0.87 times its book value.
These policy moves are expected to support sustained ethanol demand, benefiting sugar producers and distilleries. With the government driving the blending roadmap and ensuring a reliable supply of feedstock, investor sentiment around sugar stocks turned notably positive.
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