Indian Sugar Stocks Drop After Ethanol Diversion Ban
The Government of India ordered oil marketing companies to stop diverting sugar for ethanol production, causing shares of major sugar mills to decline.
Shares of major Indian sugar companies fell between 2% and 6% on October 19, 2026, following a directive from the Government of India. The government ordered oil marketing companies to eliminate the diversion of sugar for ethanol production for the 2026/27 supply year.
The new ethanol tender excludes supplies derived from sugar syrup, sugarcane juice, and B-heavy molasses. This policy shift removes a high-margin revenue stream for sugar mills, leading to immediate market volatility.
Stocks for several industry leaders, including Balrampur Chini Mills, EID Parry, Triveni Industries, Bajaj Hindusthan Sugar, Shree Renuka, and Dhampur Sugar, declined during morning trade as investors reacted to the loss of ethanol-based income.
