Sugar stocks tank up to 10% amid reports that govt may curb exports

NEW DELHI: After cutting fuel taxes, imposing tough tariffs on steel exports, and banning wheat exports, the government has taken another step to curb food inflation in the country.

News agencies on Tuesday reported that the government is going to limit sugar exports, which will help bring down domestic prices but further flame global food prices. Reports said the government may cap sugar exports at 10 million tonnes for the year ending September

Following the news flash, share prices of sugar stocks tanked as the limit will cut into the topline of these companies. Balrampur Chini Mills fell about 8 per cent, Ugar Sugar was down 5 per cent, Avadh Sugar 8 per cent, Dwarikesh Sugar 8 per cent, Renuka Sugar 10 per cent and Dhampur Sugar 5 per cent.

India is the world's second-largest sugar producer after Brazil. Thus, any curb in export will further increase the prices of the commodity. Since 2010-11, India has consistently produced surplus sugar, comfortably exceeding the domestic requirements, the government has claimed.

India's sugar exports had increased to $4.6 billion (about Rs 35,000 crore) in 2021-22 from $1.17 billion (about Rs 9,000 crore) in 2013-14, the commerce ministry had said in April. India exported sugar to 121 countries across the globe, it said.

Earlier, Indian Sugar Mills Association, an industry body of the sugar companies, had projected that India's sugar export may touch 85 lakh tonnes in the ongoing 2021-22 marketing year ending September.