Indian sugar stocks extended their rally into a second session on Friday, with shares across the sector up 12% over two days, as domestic sugar prices climbed 8-10% over the past month to a seven-year high.

According to the report, the surge reflects a combination of rising global sugar prices, supply concerns in Brazil and Thailand, higher ethanol demand and expectations of tighter Indian exports — factors that have strengthened the outlook for sugar producers.

Balrampur Chini Mills, Dhampur Sugar Mills and Dalmia Bharat were the prominent names in the move, with Avadh Sugar & Energy, Uttam Sugar Mills, Dwarikesh Sugar Industries and Magadh Sugar & Energy also in focus. Other sugar-sector stocks referenced in the report include Shree Renuka Sugars, EID Parry (India) and Triveni Engineering & Industries.

What is moving the stocks

Rising domestic prices. Domestic sugar prices have risen 8-10% over the past month to their highest level in seven years, improving realizations for producers. Sugar is also a household staple and a component of India's food inflation basket, and past episodes of sharply higher prices have prompted government measures such as export restrictions and stock limits on mills.

Tighter global supply. The report highlights supply concerns in Brazil and Thailand. Brazil is the world's largest sugar producer and exporter, Thailand is one of the biggest exporters, and India is the world's largest consumer and among the top producers, so disruptions to supply in these key origins and rising international prices feed directly into the domestic sector's outlook. Much of Brazil's output comes from its center-south region, where crushing typically runs from around April to November.

Higher ethanol demand. Indian sugar mills convert sugarcane-based feedstock such as molasses and sugarcane juice into fuel ethanol under the country's ethanol blending programme, under which the government targets 20% ethanol blending in petrol — a goal advanced to the 2025-26 ethanol supply year from an earlier 2030 timeline, with blending having risen from low single digits a decade ago. Stronger ethanol demand supports mill revenues and diverts cane away from sugar production.

India may cut exports. Under the heading "India may cut exports," the report points to expectations that India could restrain overseas sugar shipments. India has previously restricted sugar exports to safeguard domestic availability — exports were capped at about 6 million tonnes in the 2022-23 season — and tighter shipments from a major producer would further reduce global supply. With India's crushing season running from October to September, the export and ethanol policy calls for the coming season are among the variables that will shape the domestic supply-demand balance.

Source: Economic Times Markets, published August 14, 2026.