Top 5 Sugar Stocks to Watch as Supply Crunch Drives Prices Higher

livemint.com:

Indian sugar stocks have been in the limelight for past two weeks with marquee scrips rising as much as 15-20%. This is amid concerns about a global sugar shortage. Avlean, the world's largest sugar trader, recently said it expects a sixth straight year of sugar deficit, as supply will be affected by a poor harvest in India.

Sugar is one of the major agro-based commodities produced around the world. India, being the largest consumer and also the second-largest sugar producer globally, plays a big part when there’s a deficit or surplus. The trouble began with below-average monsoon rains in Maharashtra and Karnataka, major sugarcane-growing regions.

These insufficient rains resulted in reduced sugar production. If the monsoon doesn't improve, India might face a sugar shortage soon. This situation has prompted investors to take a close look at sugar stocks amid hopes of higher prices, culminating in higher revenue and profit.

The sentiment was further fuelled by a report from Reuters saying India is considering banning sugar exports. If true, this will be the first time in seven years that India will ban sugar exports. This move is considered to ensure sugar availability for domestic consumption.

For investors, this appears to be a promising opportunity to potentially generate strong returns. Here are the top 5 sugar stocks to watch. #1 Dalmia Bharat Sugar & Industries At the top of our list, we have Dalmia Bharat Sugar & Industries.