Shares of sugar companies, including Balrampur Chini Mills, Dhampur Sugar, Dalmia Bharat Sugar, Shree Renuka Sugars and EID Parry, rallied up to 11% as sugar prices climbed sharply amid tight inventories and supply concerns. Prices have risen from around Rs 41-42 per kg in the quarter to above Rs 50 per kg.

In today’s session, Balrampur Chini Mills gained over 3% to Rs 752 on the BSE, while Dhampur Sugar Mills gained 8% to Rs 200 per share. Uttam Sugar gained 11% to Rs 359 per share.

Triveni Engineering shares rose 4% to Rs 306, while Eid Parry gained over 4% to Rs 831. ) Festive period - India's sugar demand usually surges from August to November as the country celebrates festivals like Ganesh Chaturthi, Dussehra and Diwali, which leads to heightened demand for sweets, biscuits and other confectionery items..

However, sugar prices have risen 10% over the past month to record highs, with analysts expecting them to remain elevated for at least the next three months. ) Supply worries - A key trigger behind the sugar price spike is the worsening supply outlook in Brazil, the world's largest sugar producer.

The country has warned of a delay in the harvest amid adverse weather conditions. Adding to uncertainty, Brazil has suspended its bi-weekly harvest and production reports, leaving investors with limited visibility on the supply situation.

The shift towards ethanol is further intensifying concerns over a potential sugar supply crunch. In June, 58% of Brazil's cane juice was diverted towards ethanol, given that it is likely to be more profitable than sugar.

Brazil has also raised its mandatory ethanol blending target to 32% in July from 30% in June, significantly higher than the 25-27% mix seen just months earlier. Supply concerns are not limited to Brazil.

98 million tonnes. 5 million tonnes.

India, the world's second-largest sugar producer after Brazil, is also projecting lower sugar production. Authorities are physically verifying mill volumes to enforce strict hoarding limits.

Global deficit estimates are also pointing towards a tighter market. 7 million tonnes.

26 million tonnes. Read more: No ethanol link, decline in sugarcane production and stockpiling driving up sugar price: ExpertsWith production concerns mounting across major sugar-producing regions and global benchmark prices continuing to climb, the supply outlook has emerged as the key factor driving the sharp move in sugar prices.