Sugar Stocks Extend Rally As Prices Soar

Sugar Stocks extended gains for the second straight day on Monday after domestic sugar prices touched a multi-year high ahead of the festive season, tracking a global rally in the commodity. 

Globally, sugar prices are at a 4-year high following lower than forecast crop in Brazil, the biggest producer of the commodity. 

Dalmia Bharat Sugar rallied over 12 per cent today on top of Friday's 4.14 per cent gain while Mawana Sugar surged 11 per cent on top of Friday's 6.92 per cent gains. 

Domestic sugar prices at factory gate has touched Rs 36 per kilogram, and at retail level it is hovering around Rs 42-43/kg, Siddharth Shriram, advisor at Mawana Sugars told NDTV Profit. 

"At current prices all the sugar companies including us are in profit," Mr Shriram added. 

Analysts further believe that domestic sugar prices will continue to remain firm for next 12 months. "I firmly believe that sugar price would remain strong for next 12 months. There has been around 78 per cent fall in sowing of sugarcane area," G Chokkalingam of Equinomics Research & Advisory told NDTV Profit. 

However, Mr Shriram of Mawana Sugars said that the government may take measures if domestic prices rise significantly from current levels. 

"Sugar prices are trending upward but don't expect them to touch Rs 40 on the wholesale side," Mr Shriram added.