Shares of sugar companies rallied 9.8% on Tuesday following reports of 7% fall in India’s sugar output so far this year. Erratic weather conditions have hampered cane yields, which could further result in a reduction in exports.
From the pack,
was one of the biggest gainers. The stock rallied 9.8% in Tuesday’s trade on the BSE to hit its 52-week high of Rs 99.
rallied over 6%. The stock has given a return of over 49% in the last one week.
Sugar stocks such as
, , Avadh Sugar, Dhampur Bio Organics rallied up to 6%.
Low cane yield in major states like Maharashtra and Karnataka is one of the major reasons for the drop in sugar output. Reuters has reported that on an average, farmers reported a 15-35% drop in cane yield.
Maharashtra, which accounts for more than a third of the country’s sugar output, was expected to produce a record 13.8 million tonne of sugar in the current marketing year that began on October 1, up from the previous year’s 13.7 million tonne, according to the state government.
This drop in cane yield is expected to result in the reduction of exports, which can further affect India’s position as the second largest exporter of sugar cane.