Across the board, all the frontline sugar stocks hit  a new low today. Bajaj Hindusthan Sugar hit a 52-week low at Rs.11.41; Triveni En & Inds is down over 5% and hit a new low today; Dhampur Sugar Mills too hit a new low at Rs.160.10; Balrampur Chini hit a new low at Rs.97 and so did Dalmia Bharat Sugar at Rs.88.95 and Simbhaoli Sugar at Rs.12.62.

The reason? A report put out by Bloomberg states that there will be a situation of glut, oversupply in the sugar sector this season. India will actually add-on to this global glut as sugar output during Oct-Feb season was up 42% (YoY) due to better monsoon and higher cane acreages. Also, crushing season began much earlier than usual, with mills operating at 10% capacity.

Increased output means price is expected to come down further.  Prices have come down 7% to Rs.3500/tonne in 2018 – the lowest in four years, despite a hike in import duty from 50% to 100% and restricting inventory levels with mills for Feb and March months.

Reports are that mills in Maharashtra and Karnataka have already started shutting down operations.