Sugar stocks in Asia rose today, following a jump in sugar prices on concerns that an El Niño weather pattern could disrupt crop yields in Brazil, the world’s largest sugar producer.
The ICE Futures US March raw sugar contract rose 0.9% to settle at 19.25 cents per pound, its highest close since February 2017.
In Asia, sugar stocks for immediate delivery rose to 1.1 million tonnes from 995,000 tonnes a week earlier, according to data from Singapore-based broker Czarnikow.
“The market is looking at the El Niño risk and the possibility of a drought in Brazil,” said a Singapore-based trader. “That’s why we’re seeing sugar prices move higher.”
El Niño is a climate pattern that occurs every few years when the Pacific Ocean warms up. It can cause droughts in Brazil, which is the world’s largest sugar producer.
A drought in Brazil could reduce the country’s sugar output and lead to higher sugar prices.
“If there is a drought in Brazil, it could be a very bullish event for sugar prices,” said the Singapore-based trader.
Sugar prices have been on the rise in recent months, due to a combination of factors, including the El Niño risk, strong demand from China and India, and a decline in sugar output from Brazil.
The rise in sugar prices has been a boon for sugar producers, but it has also led to higher prices for consumers.
In India, the government has capped the price of sugar at 32 rupees per kilogram, but some retailers have been selling sugar for more than 35 rupees per kilogram.
The government has said that it is monitoring the situation and will take action against retailers who are selling sugar at inflated prices.
Top Sugar Stocks in Asia
Bajaj Hindusthan Sugar is India’s largest sugar producer and has a market capitalization of over $1 billion.
Dalmia Bharat Sugar is another large Indian sugar producer with a market capitalization of over $500 million.
Triveni Engineering & Industries is a sugar and ethanol producer with operations in India and Bangladesh. It has a market capitalization of over $200 million.
EID Parry is a diversified Indian company with interests in sugar, ethanol, and renewable energy. It has a market capitalization of over $1 billion.
Top 15 Suger Stocks in India
| S.No. | Name | CMP Rs. | Mar Cap Rs.Cr. | 1Yr return % |
|---|---|---|---|---|
| 1. | Shree Renuka Sugars | 44.97 | 9571.81 | -15.88 |
| 2. | EID Parry | 477.25 | 8472.02 | -12.24 |
| 3. | Balrampur Chini | 406.10 | 8202.70 | -1.93 |
| 4. | Triveni Engineering | 295.20 | 6461.88 | 6.72 |
| 5. | Bannari Amman Sugars | 2897.00 | 3632.75 | 10.26 |
| 6. | Dalmia Bharat | 372.60 | 3016.15 | -2.36 |
| 7. | Bajaj Hindusthan | 16.28 | 2079.58 | 5.94 |
| 8. | Dhampur Sugar | 277.40 | 1841.62 | 2.39 |
| 9. | Dwarikesh Sugar | 93.43 | 1759.22 | -14.28 |
| 10. | Ugar Sugar Works | 116.00 | 1305.03 | 117.93 |
| 11. | Dhampur Bio | 170.00 | 1128.54 | |
| 12. | Uttam Sugar Mills | 285.90 | 1090.39 | -1.53 |
| 13. | Avadh Sugar | 512.35 | 1025.63 | -15.25 |
| 14. | DCM Shriram Inds | 73.32 | 637.81 | -16.38 |
| 15. | Davangere Sugar | 62.00 | 583.45 | 292.58 |