Shares of sugar companies such as Dalmia Bharat Sugar, Shree Renuka, Uttam Sugar, and Balrampur Chini Mills, among others, rallied up to 4% on Tuesday after food ministry approved an additional export quota of 87,587 tonnes of sugar for the 2025-26 marketing year (October-September), following requests from sugar mills, the ministry said in a circular on Monday.

Dalmia was the biggest gainer, rising over 4% to their day’s high of Rs 314 on the BSE. Shree Renuka traded higher by 2% at Rs 24, while Balrampur Chini Mills traded marginally higher. Uttam Sugar Mills was up over 2% at Rs 199 per share on the BSE.

The government had earlier permitted exports of 1.5 million tonnes for the season, and in February allocated an extra 500,000 tonnes to willing mills on a non-swappable basis. Mills had until February to apply for portions of the additional quota. Of the 500,000 tonnes, only 87,587 tonnes were requested and approved, with the remainder lapsing, the ministry stated.

Sugar is a tightly regulated sector, and excess stock can hurt realisations. Allowing exports, even in limited quantities, helps mills offload surplus sugar into global markets, supporting domestic prices.

Mills must export the allocated sugar by June 30, 2026. Those exporting at least 70% of their quota by that date will be allowed to ship the balance by September 30, 2026. Failure to meet the 70% threshold will result in the unutilised quantity lapsing, with potential reallocation to higher-performing or willing mills.

Mills violating prior stockholding limits under a March 2025 order are ineligible for quotas this season. Supplies to special economic zone refineries count as exports. Exports under the Advance Authorisation Scheme continue as before.

India has exported 315,000 tonnes of sugar from October to February in the 2025-26 season against a total permitted quota of 1.5 million tonnes, according to recent industry data.Prices have been on an uptrend of late amid soaring oil prices. The shooting oil prices rekindled expectations of Brazil producing more ethanol and less sugar, which in turn boosted the latter’s prices.

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A sustained increase in oil prices could support the transition to Ethanol, leading to tighter supply and rising prices for sugar, which will benefit the sugar companies.

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