Indian sugar stocks drop as government halts sugar diversion for ethanol

E I D-Parry (India)

Mon 06:07

** Shares of Indian sugar companies such as Balrampur Chini BACH.NS, EID Parry EIDP.NS, Bajaj Hindusthan Sugar BJHN.NS, Shree Renuka SRES.NS, Dalmia Bharat Sugar DLMI.NS, Dhampur Sugar DAMS.NS fall 2% to 5%
** Drop after government directs oil marketing companies to reduce sugar diversion for ethanol production to zero for the 2026-2027 supply year    
** Government's decision aimed at increasing domestic sugar availability and easing record high prices in India, the world's biggest sugar consumer amid rising demand due to the festive season
** Decision limits sugar manufacters' ability to shift cane and molasses between sugar and ethanol, weakening margins and reducing the return on ethanol-capacity investments
** Latest ethanol tender excludes supplies produced from sugarcane juice, sugar syrup and B-heavy molasses, a sugar-rich by-product of cane crushing

 (Reporting by Bharath Rajeswaran in Bengaluru)
 ((bharath.rajeswaran@thomsonreuters.com; +91 9769003463;))