Sugar stocks find themselves in a sweet spot after the target date for achieving 20 percent ethanol blending has been brought forward by two years to 2023. Further, news of Brazil facing its worst drought in 91 years could also spell gains for the Indian sugar players. Vijay Banka, MD, Dwarikesh Sugar Industries shared his views.

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“The announcement of advancing the date for ethanol blending up to 20 percent to 2023 is directionally a very positive step,” he said in an interview with CNBC-TV18. “It seems a little difficult to achieve by that date, but the agenda has been set,” he further added.

He expects the capacities to be ramped up. “We expect sugar companies to use more of sugarcane juice directly for making ethanol, B-heavy molasses, and the conventional C-heavy molasses, which were hitherto being used by the sugar companies will be a thing of the past,” he shared.

According to him, with more focus on ethanol, sugar production will come down. “I think sugar companies will have better times. Most companies, which used to report not very attractive results in the sugar segment, perhaps will have decent results,” he stated.

On sugar prices, he said, “We have seen sugar prices firming up a little. I think, the coming year should be a good year. We have had unprecedented dry weather conditions in Brazil this year. We have seen international prices getting better, they are hovering between 0.17 cents and 0.18 cents. That does have a sentimental impact on the domestic sugar prices as well.”

"The prices should be better than last year," he mentioned.

For the full interview, watch the accompanying video.

(Edited by : Dipika)

First Published:Jun 4, 2021 11:08 AM IST