EIDPARRY

** Shares of NACL Industries NACL.NS rise 12% to 89.13 rupees, set to gain for a third straight session, if current trend holds

** Coromandel International CORF.NS to acquire 53.13% stake in NACL from promoters

** CORF also made an open offer to acquire up to 26% stake in NACL from public shareholders

** Stake acquisition at 76.70 rupees per share, discount of 3.6% to stock's previous close

** NACL trading vols at 7.6 mln shares, over 12x the 30-day average

** NACL stock up ~33% YTD vs a 9.2% fall in 2024

(Reporting by Vijay Malkar)

(([email protected];))

Feb 11 (Reuters) - E I D-Parry (India) Ltd EIDP.NS:

• Q3 LOSS AFTER TAX 1.46 BILLION RUPEES

• Q3 REVENUE FROM OPERATIONS 8.48 BILLION RUPEES

Source text: ID:nBSE7tMw0w

Further company coverage: EIDP.NS

(([email protected];;))

** Indian sugar companies gain between 2.4% and 6.6%

** Indian government preparing for final decision on proposed ethanol price increase, ET Now reports citing sources

** Report says price of ethanol made from B-heavy molasses expected to rise by ~2 rupees/litre, while price of ethanol made from sugarcane juice likely to climb 1.50 rupees/litre

** Balrampur Chini Mills BACH.NS, Bajaj Hindusthan Sugar BJHN.NS, Dhampur Sugar Mills DAMS.NS, Dalmia Bharat Sugar and Industries DLMI.NS, E.I.D. - Parry (India) EIDP.NS, Shree Renuka Sugars SRES.NS, Triveni Engineering and Industries TREI.NS up 2.4%, 3.9%, 6.6%, 4.8%, 3%, 4.1% and 2.9%, respectively

** In 2024, BJHN, BACH, TREI, EIDP advanced 9.2%, 29.1%, 32.3%, 60.5%, respectively; SRES lost 16.3%, DLMI fell 12% and DAMS shed 36.3%

(Reporting by Ashish Chandra in Bengaluru)

(([email protected] (+91 7982114624))

By Rajendra Jadhav

MUMBAI, Dec 23 (Reuters) - Sugarcane yields in India are declining due to last year's drought and this year's excessive rains, which could reduce the country's sugar production below consumption levels for the first time in eight years, farmers and industry officials said on Monday.

Lower-than-expected output by the world's second-largest sugar producer could eliminate the possibility of India allowing exports in the current season ending in September 2025, supporting global sugar prices SBc1, LSUc1.

Maharashtra, Karnataka, and Uttar Pradesh account for more than 80% of the country's total sugar production, with lower cane yields in these states prompting trade houses to reduce their output estimates for the 2024/25 season.

The production could fall to around 27 million metric tons from the last year's 32 million tons and below annual consumption of more than 29 million tons, said India head of a global trade house, who declined to be named.

"During the summer months, the cane crop faced prolonged stress due to the lack of water," B.B. Thombare, president of the West Indian Sugar Mills Association told Reuters.

"When the monsoon season began, there was excessive rainfall and limited sunshine, which also adversely affected the crop's growth."

The adverse weather curtailed cane yields by 10 to 15 tons per hectare, Thombare said.

The western state of Maharashtra and neighbouring Karnataka, which together produce nearly half of India's sugar, received lower-than-average rainfall in 2023, bringing down reservoir levels.

"Usually, we harvest 120 to 130 tons of cane from one hectare of land, but this year yields have fallen to 80 tons despite all our efforts," says Shrikant Ingle, who cultivated cane on five acres of land in Maharashtra's Solapur.

Drought did not affect the crop in Uttar Pradesh, the country's leading sugar-producing state in the north.

However, plantations in the state were impacted by red rot disease, which reduced sugarcane yields, said a senior state government official.

"To control the spread of the disease, we are advising farmers to adopt new cane varieties," the official said.

The downward revision in the production estimate has eliminated the possibility of any exports in the current season, the head of the trade house said.

Sugar industry seeks 2 million tons of exports, while the government says it may allow limited exports, if any surplus remains after ethanol needs are met.

(Reporting by Rajendra Jadhav; Editing by Janane Venkatraman)

(([email protected]; Reuters Messaging: x.com/Rajendra1857))

** Shares of EID Parry India EIDP.NS rise as much as 7.6% to record high of 997 rupees, last up 6.2%

** Trading vols at 4.5 mln, 8.5x 30-day average

** Reuters could not immediately ascertain the reason behind day's move

** Relative strength index (RSI) rises to 71.4, suggesting stock might be overbought - LSEG

** EIDP up ~77% YTD

(Reporting by Vijay Malkar)

(([email protected];))

By Rajendra Jadhav

MUMBAI, Dec 5 (Reuters) - Sugar prices in India fell to their lowest level in 1-1/2 year due to ample supplies, making it difficult for mills to pay farmers the cane price as the crushing season gains momentum, industry officials told Reuters.

The fall in prices is prompting industry to demand immediate revision in minimum selling price (MSP) to limit losses, which will improve mills' margins and allow them to make timely cane payments to millions of cane growers.

"Sugar prices have fallen below the cost of production. This makes it difficult for mills to pay the revised cane price unless sugar prices rise," said B.B. Thombare, president of the West Indian Sugar Mills Association.

Wholesale sugar prices SUG-ARSKOL-NCX at Kolhapur in western state of Maharashtra have fallen nearly 8% in past four months to 33,675 rupees ($397.60) per ton, the lowest since June 2023.

The government should quickly raise the MSP above 40,000 rupees per ton to make cane crushing viable for sugar mills, Thombare said.

Indian trade bodies have been demanding an increase in the MSP, saying the government has raised the mandatory procurement price of sugarcane in recent years while the MSP has remained unchanged since 2019.

Sugar prices are falling as demand has decreased after the festival season, and new season supplies have begun, said Ashok Jain, president of the Bombay Sugar Merchants Association.

Indian mills have produced 2.79 million metric tons of sugar since the current season began on Oct. 1, down 35.4% year on year, a leading industry body said on Monday.

Mills in Maharashtra, which recently underwent state elections, sold more sugar than allocated, as mills controlled by politicians needed funds for election campaigns, said a Mumbai-based trader.

"The market was flooded with sugar in the past two months. This is why mills are now struggling to sell sugar, even at lower prices," the trader said.

($1 = 84.6950 Indian rupees)

(Reporting by Rajendra Jadhav; editing by David Evans)

(([email protected]; Reuters Messaging: x.com/Rajendra1857))

** Shares of E.I.D.-Parry (India) EIDP.NS fall as much as 4.3% to 748.2 rupees

** Sugar maker reported 67.2% y/y drop in Q2 PAT to 282.5 mln rupees ($3.4 mln), on Thursday

** Stock set to fall for a second straight month

** EIDP last down 2.9%, trimming YTD gains to ~36%

($1 = 84.3770 Indian rupees)

(Reporting by Anuran Sadhu in Bengaluru)

(([email protected]; +91 8697274436;))

Nov 14 (Reuters) - E I D-Parry (India) Ltd EIDP.NS:

• E I D-PARRY (INDIA) Q2 PAT 282.5 MILLION RUPEES

• E I D-PARRY (INDIA) Q2 REVENUE FROM OPERATIONS 7.55 BILLION RUPEES

Source text: [ID:]

Further company coverage: EIDP.NS

(([email protected];))

** Coromandel International CORF.NS falls as much as 4.9% to 1,560.30 rupees

** Agricultural chemicals maker posts 12.3% drop in Q2 consolidated PAT y/y

** Rev from ops rose 6.4%, but was outdone by 9.3% rise in total expenses on higher costs of raw materials

** Trading vol same as the 30-day avg of 369,281 shares

** Stock rated "buy" on avg; median PT is 1,904 rupees - LSEG

** CORF last down 3.3%, trimming YTD gains to 26.7%

(Reporting by Ashish Chandra in Bengaluru)

(([email protected] (+91 7982114624))

* India's sugar companies jump between 6.5% and 10.2%

* Food minister on Thursday said that India is considering raising domestic prices of ethanol and sugar

* Shree Renuka Sugars SRES.NS, Balrampur Chini Mills BACH.NS, Bajaj Hindusthan Sugar BJHN.NS, EID Parry (India)EIDP.NS rose 10.2%, 6.5%, 8.3%, and 3.6%, respectively

* YTD SRES up ~12%, while BACH, BJHN, and EIDP gained ~58%, ~55%, and ~54%, respectively

(Reporting by Vijay Malkar)

(([email protected];))

Adds details, comments from industry officials

By Rajendra Jadhav

MUMBAI, Aug 29 (Reuters) - India will allow sugar mills to use cane juice or syrup to produce ethanol in the new marketing year starting Nov. 1, the government said in a notification on Thursday.

The world's second-biggest sugar producer imposed restrictions on diverting sugar for ethanol production in December 2023 to increase sugar output after cane crop was hit by below-average monsoon rains.

In the new season, distilleries can also use B-heavy molasses, a byproduct with higher sucrose levels, for ethanol production, the government said in the notification.

Around 750,000 metric tons of B-heavy molasses are lying in stock with mills after the government restricted ethanol production from this feedstock last year, said Prakash Naiknavare, managing director of the National Federation of Cooperative Sugar Factories Ltd.

"Now that the restriction is lifted, they can use these stocks," Naiknavare said.

Indian sugar mills such as E.I.D.-Parry EIDP.NS, Balrampur Chini Mills BACH.NS, Shree Renuka SRES.NS, Bajaj Hindusthan BJHN.NS, and Dwarikesh Sugar DWAR.NS have increased their ethanol production capacity in the last few years.

The south Asian country also allowed distilleries to purchase up to 2.3 million metric tons of rice from the state-run Food Corporation of India (FCI) for ethanol production, the government said in a separate notification.

"The permission to utilise FCI rice as a feedstock will enhance ethanol production from dual-feed distilleries," said Vijay Nirani, managing director of TruAlt Bioenergy Ltd.

The two policy changes will not only help increase ethanol blending in gasoline but also help mills and distilleries make timely cane payments to millions of farmers, Nirani said.

India aims to increase ethanol production to blend 20% ethanol into gasoline by 2025-26, from around 13% now.

(Reporting by Rajendra Jadhav; Editing by Kirsten Donovan and Devika Syamnath)

(([email protected]; +91-22-68414378 ; Reuters Messaging: [email protected]))

Aug 14 (Reuters) - E I D-Parry (India) Ltd EIDP.NS:

• E I D-PARRY (INDIA) JUNE-QUARTER LOSS AFTER TAX 785.9 MILLION RUPEES

• E I D-PARRY (INDIA) JUNE-QUARTER REVENUE FROM OPERATIONS 7.51 BILLION RUPEES

Further company coverage: EIDP.NS

(([email protected];))

BENGALURU, Aug 2 (Reuters) - India's Dalmia Bharat Sugar and Industries DLMI.NS reported a 10.8% fall in first-quarter profit on Friday, hurt by higher inventory and expenses.

The company, which supplies sugar to companies like Coca-Cola KO.N, Britannia BRIT.NS, Dabur DABU.NS, and Carlsberg CARLb.CO, reported consolidated net profit of 547.3 million rupees ($6.5 million), compared to 613.4 million rupees year ago.

Revenue from operations rose 15.2% to 9.6 billion rupees. However, total expenses rose 19.2% to 9.01 billion rupees.

For further results highlights, click nFWN3JP2T9

KEY CONTEXT

Indian sugar companies have been battling increased inventory costs. While Dalmia Bharat's inventory cost rose more than two-fold in the first quarter, rival Dwarikesh Sugar Industries DWAR.NS and Dhampur Sugar Mills DAMS.NS saw those expenses grow more than five-fold and nearly 10% respectively.

India, the world's largest sugar consumer and second-biggest producer, restricted the use of sugar in ethanol production during the 2023/24 marketing year that ends on Sept. 30 and also prohibited exports to keep a lid on domestic prices, leading to a larger inventory for the companies.

PEER COMPARISON

* Mean of analysts' ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell

** Ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT

APRIL-JUNE STOCK PERFORMANCE

-- All data from LSEG

-- $1 = 83.7250 Indian rupees

(Reporting by Ashish Chandra in Bengaluru)

(([email protected]; +91 7982114624;))

Repeats July 27 story to reach additional subscribers with no changes to text

By Rajendra Jadhav

MUMBAI, July 27 (Reuters) - India will make a decision on sugar industry calls for a hike in the minimum selling price (MSP) in the coming days, a senior government official said on Saturday, adding that ethanol policies would be set before the start of the next season.

India, the world's largest sugar consumer, restricted the use of sugar in ethanol production during the 2023/24 marketing year that ends on Sept. 30 and also prohibited exports to keep a lid on domestic prices.

"We are discussing the MSP (proposal). In the coming days, we will hopefully take a call," Food Secretary Sanjeev Chopra told reporters during a conference.

The sugar-processing industry has been demanding an increase in the minimum selling price, saying the government has raised the mandatory procurement price of sugarcane in recent years while the MSP has remained unchanged since 2019.

Industry bodies say a higher MSP would enable them to make timely payments to millions of sugarcane farmers in the upcoming season starting on Oct. 1.

Chopra said the production outlook for the next season has improved due to good monsoon rainfall and increased sugarcane acreage, allowing the government to formulate policies for the next year.

The sugarcane area has edged up to 5.77 million hectares (14.3 million acres) from 5.7 million hectares (14.1 million acres) a year ago, farm ministry data showed.

"We should be having very healthy stocks at the end of the present sugar season, which would allow us to have better planning of its diversion in the next year," Chopra said, referring to sugar's use in ethanol production.

India is expected to begin the new marketing year with carryover stocks of 8 million to 8.5 million metric tons, he said.

(Reporting by Rajendra Jadhav;
Editing by Helen Popper)

(([email protected]; +91-22-68414378 ; Reuters Messaging: [email protected]))

By Rajendra Jadhav

MUMBAI, July 27 (Reuters) - India will make a decision on sugar industry calls for a hike in the minimum selling price (MSP) in the coming days, a senior government official said on Saturday, adding that ethanol policies would be set before the start of the next season.

India, the world's largest sugar consumer, restricted the use of sugar in ethanol production during the 2023/24 marketing year that ends on Sept. 30 and also prohibited exports to keep a lid on domestic prices.

"We are discussing the MSP (proposal). In the coming days, we will hopefully take a call," Food Secretary Sanjeev Chopra told reporters during a conference.

The sugar-processing industry has been demanding an increase in the minimum selling price, saying the government has raised the mandatory procurement price of sugarcane in recent years while the MSP has remained unchanged since 2019.

Industry bodies say a higher MSP would enable them to make timely payments to millions of sugarcane farmers in the upcoming season starting on Oct. 1.

Chopra said the production outlook for the next season has improved due to good monsoon rainfall and increased sugarcane acreage, allowing the government to formulate policies for the next year.

The sugarcane area has edged up to 5.77 million hectares (14.3 million acres) from 5.7 million hectares (14.1 million acres) a year ago, farm ministry data showed.

"We should be having very healthy stocks at the end of the present sugar season, which would allow us to have better planning of its diversion in the next year," Chopra said, referring to sugar's use in ethanol production.

India is expected to begin the new marketing year with carryover stocks of 8 million to 8.5 million metric tons, he said.

(Reporting by Rajendra Jadhav;
Editing by Helen Popper)

(([email protected]; +91-22-68414378 ; Reuters Messaging: [email protected]))

** Shares of Indian sugar companies surge on reports govt will increase minimum selling price for the commodity

** Shares of Dalmia Bharat Sugar and Industries DLMI.NS, Triveni Industries TREI.NS, Bajaj Hindusthan Sugar BJHN.NS Dhampur Sugar Mills DAMS.NS and Balrampur Chini Mills BACH.NS rise between 4% and 14%

** EID Parry EIDP.NS up 2%

** BJHN hits highest since Sept 2011

** Bajaj Hindusthan top gainer among sugar stocks YTD, up 50%, while Dhampur down 1.5% so far this year

(Reporting by Sethuraman NR in Bengaluru)

(([email protected]; (+91 9945291420); Reuters Messaging: [email protected]))

** Shares of Coromandel International CORF.NS up 3.3% at a record high of 1,438.2 rupees

** Agro-chemical co says it commissioned a nano fertilizer plant in its existing Kakinada complex with capacity of 2 million metric tonnes

** Trading volume over 730,000 shares, 1.6x the 30-day avg

** Analysts' rating on stock is "buy", in-line peers UPL UPLL.NS and Sumitomo Chemical SUMH.NS - LSEG data

** Including session's gains, stock up ~15% YTD vs ~12% rise in the Nifty 500 index .NIFTY500

(Reporting by Manvi Pant in Bengaluru)

(([email protected]; +918447554364;))

** Shares of India's Coromandel International CORF.NS up as much as 3.4% to hit record high, last up 2.6%

** Fertiliser maker unveils 10 new crop production products

** Stock on track to snap four-session-run of losses, if trends hold

** Trading vols at 1.5x the 30-day avg

** CORF rated "buy" on average with median PT of 1,280 rupees - LSEG data

** YTD, stock up 0.8%

(Reporting by Hritam Mukherjee in Bengaluru)

(([email protected];))

May 21 (Reuters) - E I D-Parry (India) Ltd EIDP.NS:

• NEW 120 KLPD DISTILLERY OF CO AT SUGAR UNIT OF CO AT HALIYAL COMMENCED COMMERCIAL OPERATIONS

Source text for Eikon: ID:nNSE3kYy4B

Further company coverage: EIDP.NS

(([email protected];))

** Shares of sugar firms EID Parry EIDP.NS, Balrampur Chini Mills BACH.NS, Shree Renuka Sugars SRES.NS, Dwarikesh Sugar DWAR.NS, Bajaj Hindusthan Sugar BJHN.NS settle 1.5%-5% lower

** Indian government on Monday ruled out possibility of allowing sugar exports in 2023-24 season ending October, newspaper Business Standard reported, citing Press Trust of India

** Sugar exports in India currently curbed for an indefinite period

** Fall amid broader sell-off in the markets, benchmark Nifty 50 .NSEI settled 1.1% lower

** YTD, BJHN and EIDP up 11.3% and 9.3%, respectively, while SRES, BACH and DWAR down 8.4%-15.7%

(Reporitng by Nishit Navin)

(([email protected];))

Adds chart of top purchases and sales by mutual funds

** India's HDFC Bank HDBK.NS was the top buy for Indian mutual funds in Feb, with purchases worth 82.8 bln rupees (~$999 mln), Nuvama says in a note

** That came after HDFC Bank's shares slid 14% in Jan and 4% in Feb following dissappointing Q3 results

** Mutual funds sold 22.9 bln rupees worth Sun Pharma SUN.NS shares in Feb and 6.5 bln rupees of Bandhan Bank BANH.NS, Nuvama Alternative & Quantitative Research says

** Adds fund houses bought 30.7 bln rupees of Whirlpool of India shares WHIR.NS; US-based Whirlpool WHR.N sold a chunk of its stake in its India unit in Feb

** TCS TCS.NS, Bharat Petroleum BPCL.NS, Axis Bank AXBK.NS and Maruti Suzuki MRTI.NS were among top additions in large caps, Nuvama says

** Top reductions included Bajaj Finance BJFN.NS, Mahindra and Mahindra MAHM.NS, Infosys INFY.NS, says Nuvama

($1 = 82.8900 Indian rupees)

(Reporting by Sethuraman NR in Bengaluru)

(([email protected]; (+91 9945291420); Reuters Messaging: [email protected]))

** Shares of sugar cos Dwarikesh Sugar DWAR.NS, Balrampur Chini Mills BACH.NS, EID Parry EIDP.NS, Shree Renuka Sugars SRES.NS and Bajaj Hindusthan Sugar BJHN.NS down between 1%-3%

** India says it will raise floor price that mills must pay for sugar cane in the 2024/25 season by 8% from Oct. 1

** Govt fixes buying price of sugar cane at 340 rupees ($4.10) per 100 kg for next season, up from this year's 315 rupees

** As of YTD, DWAR down 7.4%, BACH fallen nearly 8%, while SRES, EIDP and BJHN up between 3%-34%

($1 = 82.9140 Indian rupees)

(Reporting by Rama Venkat in Bengaluru)

(([email protected]; https://twitter.com/ramavenkat0607;))

** Shares of Anupam Rasayan India ANUY.BO down 6.7% at 861 rupees, set for its worst day ever, if trend holds

** Stock logs lowest price since Oct. 30, 2023

** Industrial chemicals maker's Q3 consol PAT fell ~52% YoY

** Rivals SRF SRFL.NS, Coromandel International CORF.NS, posted Q3 profit drops and UPL UPLL.NS posted a loss

** Avg analyst rating on ANUY is "hold", while SRF, UPL, CORF all rated "buy" - LSEG data

(Reporting by Varun Vyas in Bengaluru)

(([email protected]))

** Shares of sugar maker EID-Parry down 5.2% at 602.2 rupees

** Co posted Q3 loss from profit a year ago

** Stock set for worst day since Dec. 7 when Indian sugar stocks slumped on govt's ethanol production curbing plans

** Dalmia Bharat Sugar DLMI.NS, Dwarikesh Sugar DWAR.NS, Dhampur Sugar Mills DAMS.NS, K.M. Sugar Mills KMSU.NS also reported Q3 profit fall

(Reporting by Varun Vyas in Bengaluru)

(([email protected]))

Feb 6 (Reuters) - E I D-Parry (India) Ltd EIDP.NS:

• E I D-PARRY (INDIA) DEC-QUARTER LOSS AFTER TAX 135.9 MILLION RUPEES VERSUS PROFIT 157.8 MILLION RUPEES

• E I D-PARRY (INDIA) DEC-QUARTER REVENUE FROM OPERATIONS 6.68 BILLION RUPEES VERSUS 7.25 BILLION RUPEES

• REAPPOINTED S. SURESH AS MD

Source text for Eikon: [ID:]

Further company coverage: EIDP.NS

(([email protected];))

Jan 17 (Reuters) - E I D-Parry (India) Ltd EIDP.NS:

• ACQUIRED EQUITY SHARES OF E.I.D. - PARRY (INDIA) AND NUVAMA WEALTH MANAGEMENT

• COST OF ACQUISITION OF STAKE IN E.I.D. PARRY (INDIA) AT 35.6 MILLION RUPEES

• COST OF ACQUISITION OF STAKE IN NUVAMA WEALTH MANAGEMENT AT 50.3 MILLION RUPEES

Source text for Eikon: ID:nBSEdWqbc

Further company coverage: EIDP.NS

(([email protected];))

NEW DELHI, Dec 29 (Reuters) - India's state fuel retailers have raised procurement prices for ethanol made from C-heavy molasses by 6.87 rupees/litre, according to documents seen by Reuters on Friday.

(Reporting by Nidhi Verma; Editing by Savio D'Souza)

** Shares of Coromandel International CORF.NS fall ~4% to 1,216.75 rupees

** Agro-chemical firm said it noticed abnormality in ammonia unloading subsea pipeline outside its plant premises in southern Indian city of Chennai

** Adds, ammonia plant isolated and normalcy has been restored

** Trading volume nearly thrice the 30-day moving avg

** CORF on track for best year since 2020

** Avg rating of nine analysts on CORF at "buy"; median PT is 1,239 rupees - LSEG data

** Including session's move, stock up ~38% YTD

(Reporting by Kashish Tandon in Bengaluru)

(([email protected]))

** Indian sugar cos' shares rise after govt says it plans to allow sugar mills to divert up to 1.7 mln metric tons of sugar for ethanol production

** Shares of Dwarikesh Sugar DWAR.NS, EID Parry EIDP.NS, Shree Renuka Sugars SRES.NS, Balrampur Chini Mills BACH.NS, Triveni Engineering TREI.NS and Dhampur Sugar DAMS.NS up 3.5%-6.5%

** EID Parry and Balrampur Chini Mills are top gainers among the six sugar companies, up 3.5% and 5.3% each

** Dwarikesh Sugar and Dhampur Sugar are top pct gainers, rising 6% and 6.5%, respectively

** EIDP hits near 1-yr high, SRES and DWAR set to gain most since August

** Analysts' average rating on BACH, TREI is equivalent of "buy", per LSEG data

(Reporting by Manvi Pant in Bengaluru)

(([email protected]; +918447554364;))

By Mayank Bhardwaj and Rajendra Jadhav

NEW DELHI/MUMBAI, Dec 7 (Reuters) - India directed sugar mills not to use cane juice or syrup to produce ethanol, the government said in a notification on Thursday, as New Delhi tries to increase sugar supplies by curtailing ethanol production.

Reuters had reported on Wednesday that the government was planning to discourage the diversion of sugar for ethanol production as part of efforts to ensure sufficient supplies of the sweetener in the local market.

Fuel retailers, under current contracts, are permitted to keep their procurement of ethanol derived from B-heavy molasses, a byproduct with higher sucrose levels, the government said.

It would also allow the diversion of 1.04 million metric tons of B-heavy molasses for ethanol production under existing contracts, government officials said.

The moves will help to reduce diversion of around 2.14 million tons of sugar for ethanol-making from cane juice, they said.

An industry official had said on Wednesday the government would allow mills to produce ethanol only from C-heavy molasses, a cane by-product that has hardly any sugar content left in it.

Shares of Indian sugar and ethanol makers such as E.I.D.-Parry EIDP.NS, Balrampur Chini Mills BACH.NS, Shree Renuka SRES.NS , Bajaj Hindusthan BJHN.NS, and Dwarikesh Sugar DWAR.NS closed up to 6% lower on Thursday.

India's fuel retailers buy ethanol from sugar mills to blend with gasoline and pay a higher price for ethanol produced from juice and B-heavy molasses.

Patchy rains in the top sugar cane-growing western state of Maharashtra and southern Karnataka state have raised concerns about this year's sugar output.

The Indian Sugar Mills Association, a producers' body, last month said sugar production is likely to fall 8% to 33.7 million metric tons in the 2023/24 marketing year.

The likely production drop has lifted local sugar prices SUG-MMZR-NCX to their highest levels in nearly 14 years.

(Reporting by Rajendra Jadhav and Mayank Bhardwaj ; Editing by Emelia Sithole-Matarise)

(([email protected]; +91-22-68414378 ; Reuters Messaging: [email protected]))