Sugar stocks are rallying today with Shree Renuka leading the pack, up over 15.5% at Rs.10, with volumes surging almost 3 times. Its 52-week high is at Rs.20.50 and market cap is at Rs.915 crore.

Shree Renuka and the rest – Dhampur, Balrampur Chni, Sakthi Sugars, Bajaj Hindustan, Thiru Arooran, Dalmia Bharat – all are up in the green. Two reasons for this – firstly the oncoming festive demand which is expected to push up the sugar prices. And secondly, on the global front too, outlook has turned positive as global agencies have predicted a deficit for 2015-16. US Department of Agriculture has estimated a shortage of 3.8 million tones while International Sugar Organisation has forecast a deficit of 2.5 million tonnes.

To top it all off, Morgan Stanley has also put out a report saying that sugar prices have finally found their bottom, as the market uncouples from the ever-weakening Brazilian real.  The report said, "We think sugar prices are unlikely to revisit their seven-year lows from August," said the bank, forecasting that demand will outstrip supplies in 2015-16, which began at the start of this month.”