Share Market: Will Govt’s Decision on Ethanol Blending Affect Sugar Stocks?

Sugar Stocks: The government has made two major decisions regarding ethanol blending. This will increase the production of ethanol. First, the government has removed the ban on B-Heavy Molasses and C-Heavy Molasses Diversions. This will divert them according to the Sugar Companies Agreement. Last year, the government had set a certain limit on Diversion. At that time, only 17 lakh tons of sugar was allowed for Diversion. 

Increase in Sugar Stocks

Additionally, ethanol-making companies have also been allowed to buy 23 lakh tons of rice from the FCI at the auction, which will be used to make ethanol. With these decisions, the ethanol companies will also get help in increasing their production. Recently, there has been a sharp increase in Sugar Stocks.