Sugar stocks turn sour for investors amid restrictions on export

Sugar stocks fell substantially on Wednesday after the government announced curbs on sugar exports beginning June 1, with the goal of raising supply in the domestic market and lowering prices.

Sugar company shares fell for the second straight session, falling as high as 8%. Sugar inventories are reacting to the government’s decision to impose export limits beginning June 1.

In afternoon deals on the BSE, Dwarikesh Sugar Industries fell 8.43 percent, Dalmia Bharat Sugar and Industries fell 7.5 percent, Triveni Engineering & Industries fell about 7%, Balrampur Chini Mills fell 6.5 percent, Avadh Sugar & Energy fell 6%, Shree Renuka Sugars fell 4%, and Uttam Sugar fell 4%.

All of these stocks dropped 5 to 8% in the previous session.

According to the government. The export ban will leave two to three months of supply at the end of the season. To ensure domestic availability and price stability during the season. The Centre has approved its exports of up to 100 lakh tonnes.

The export limits will take effect on June 1. And will endure until October 31 or until new orders are issued, whichever comes first. Following that, exports would need special clearance from the Directorate General of Foreign Trade (DGFT).

Restrictions on export

The commodity mills and exporters will need to get authorization from the Directorate of Sugar, Department of Food. As well as Public Distribution, in the form of Export Release Orders (EROs).

“The decision will ensure that the closing stock of sugar at the end of sugar season (30th Sept 2022) remains 60-65 LMT which is 2-3 months’ stocks (monthly requirement is around 24 LMT in those months) required for domestic use,” the consumer affairs ministry said.

The government has been proactively examining export tariffs on various products. Moreover, to ensure enough domestic supplies as part of a series of measures to manage inflation. Also, to deal with probable food and commodity shortages in the near future.

The exports have been regulated by the government to keep domestic prices in check. Following the wheat export ban and an increase in export duty on some steel products.

Subscribe to our newsletter
Subscribe to our newsletter
Sign up here to get the latest news delivered directly to your inbox.
You can unsubscribe at any time