India’s sugar inventories are expected to fall to a nine‑year low, raising concerns about tight supply and higher prices. Production has dropped to 309 lakh tonnes against earlier estimates of 343.5 lakh tonnes. After ethanol diversion, net availability stands at 279 lakh tonnes, slightly below annual consumption of 280 lakh tonnes. Exports of 8 lakh tonnes have further reduced closing stocks to 41 lakh tonnes, the lowest since 2016‑17. To ease pressure, the government has allowed duty‑free import of 10 lakh tonnes of raw sugar for the first time in nearly a decade.
Five sugar companies are seen as potential beneficiaries. Uttam Sugar Mills reported a 16% rise in turnover to ₹1,525.95 crore and is expanding ethanol capacity with a ₹110 crore project. Balrampur Chini Mills holds 45.67 lakh quintals of inventory and is investing ₹3,080 crore in a PLA plant. Triveni Engineering has 3.59 lakh tonnes of stock and is focusing on sugar, ethanol and water businesses after demerger. Dalmia Bharat Sugar holds 2.36 lakh tonnes and is expanding into biogas and overseas ventures. Avadh Sugar has 18.26 lakh quintals of inventory and a distillery capacity of 325 KLPD.
Rising sugar prices can lift margins, but cane costs, ethanol exposure and project execution will determine which firms deliver stronger cash flows. Investors should track quarterly results closely.