Shares of sugar stock continued losing streak for the second day after the government imposed restrictions on sugar exports as a precautionary measure to bring down domestic prices. Reacting to the news, the share price of sugar stocks fell up to 5% in opening deals on Wednesday, led by Dhampur Sugar, Ugar Sugar Work, Mawana Sugars, Balrampur Chini, and Dalmia Sugar. Barring EID Parry, most of the sugar stocks were flashing in red, in an otherwise positive broader market.
Dhampur Sugar was the worst performer in the sugar sector, with a 5% loss, followed by Ugar Sugar Work and Mawana Sugars, which dropped nearly 5%. Shares of Shree Renuka, Dwarikesh Sugar, Andhra Sugar and Bajaj Hindustha fell over 2%, while sectoral leader Balrampur Chini fell nearly 1%. Bucking the trend, EID Parry shares rose more than 1%. Meanwhile, the BSE benchmark Sensex was trading 283 points higher at 54,336 levels at 10:00 am.
The government has imposed ban on all sugar exports, excluding the fixed quantity of sugar being exported under the CXL quota and tariff-rate quota to the EU and the U.S., effective from June 1.
In a notification, the Directorate General of Foreign Trade (DGFT) says "in order to maintain domestic availability and price stability of sugar", the government has put raw, refined and white sugar under the "restricted" category from the existing policy of "free".
India is the world's second-largest sugar producer after Brazil. It exported sugar to 121 countries across the globe. As per government data, India had exported sugar worth of $1,965 million in 2019-20, which rose to $2,790 million in 2020-21, and further to $4,600 million in 2021-22. In the financial year 2021-22 (FY22), sugar exports jumped by 64.90%, despite logistical challenges posed by the Covid-19 pandemic in the form of high freight rates, container shortages, etc.
In 2021-22 (April-February), India exported sugar worth $769 million to Indonesia, followed by Bangladesh ($561 million), Sudan ($530 million) and U.A.E ($270 million). India also exported sugar to Somalia, Saudi Arabia, Malaysia, Sri Lanka, Afghanistan, Iraq, Pakistan, Nepal, China, etc. Indian sweetener has also been imported by the USA, Singapore, Oman, Qatar, Turkey, Iran, Syria, Canada, Australia, South Africa, Germany, France, New Zealand, Denmark, Israel, Russia, Egypt, etc.
This week, the government has taken a slew of measures to contain rising food inflation in the country. The Centre has cut excise duty on fuel, raised tariff on steel exports, banned wheat exports, and scrapped customs duty and agriculture infrastructure development cess on the import of crude soyabean oil and crude sunflower oil to curb domestic prices.
