Sugar Stocks
Sugar stocks are like owning a tiny part of a sugar company. These companies sell sugar, which people always need, so they can make good money. If they do well, the value of your tiny part (the stock) might go up, earning you money too!
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Sugar Stocks
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What is Sugar Stocks?
"Sugar stocks" are shares of companies involved in the sugar industry, which includes growing sugar crops, processing sugar, and distributing sugar products. The value of these stocks can be influenced by sugar prices, market demand, regulatory changes, and broader economic conditions.
How to start investing in Sugar Stocks with INDmoney?
Step 1
Download the INDmoney app and create your free investment account by completing your KYC ( Know Your Customer).
Step 2
Once your Free investment account is ready, you can either search for a Sugar Stocks or go to the Stocks section and tap on Sugar collection.
Step 3
Choose a Sugar Stocks by looking at aspects like past returns, volatility, downside returns & proceed to buy.
Sugar Companies: Industry Walkthrough
The second-largest agro-based sector in India is the sugar industry. With over 12% of all work prospects in rural India, it is also a significant contribution to employment opportunities in the nation. India, which supplies 20% of the world's supply of this commodity, is the world's largest sugar producer. Gujarat, Maharashtra, Andhra Pradesh, Bihar Karnataka, Haryana, Punjab, UP, and Tamil Nadu are the top nine sugar-producing regions in the nation.
Maharashtra is regarded as the nation's leading sugar producer. 20% of sugar is produced from sugar beet, while 80% comes from sugarcane extraction. The bulk of the sugar used in India is made from sugarcane. The erratic nature of sugar output directly impacts the price of sugar. The following are some of the elements influencing sugar supply and production:
- Significant reliance on the monsoon
- Delays in payment to farmers, which causes them to switch to other crops
- worsening of the drought, which further dissuades farmers from growing water-intensive sugarcane crops
- The government implements various policies and programs to increase sugar output and maintain domestic market rates.
Why Invest in Sugar Stocks?
The sugar business in the nation is expanding due to various causes. Below is a discussion of a few leading causes of the same.
- Total sugar consumption has increased at an average CAGR of 3%.
- Molasses, a by-product of the sugar industry, contains ethanol. This ethanol creates a more affordable and environmentally friendly energy source when combined with gasoline. To support this, the administration has set the objective of integrating 10% ethanol underneath the EBP by 2022 and 20% by 2025. The sugar business has dramatically benefited since it can now employ the excess ethanol produced underneath the EBP program and profit from more significant margins.
- Consumption rising in the confectionery sector by an estimated CAGR of 6.35% is another market factor for the sugar sector (between 2021 and 2025). Sugar is another factor driving the sugar industry's development, which makes up around 25% of the segment's raw materials.
- The market growth for soft drinks is the last sector or component in the sugar business. The rise of the sugar business has received another significant boost from the nearly doubling per capita use of soft drinks over the past few years.
Frequently Asked Questions
Owing to the government’s interest in blending ethanol with fuel the prices of sugar stocks have soared in recent times.
The primary drawbacks for the sugar industry are its heavy reliance on rainfall, the years of surplus products that have driven prices under their production costs, the decline in the value of this commodity globally, etc.
Yes, sugar is traded mostly on NCDEX, a national online commodities exchange market powered by technology.
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