Shares of sugar corporations had been buying and selling with notable losses on Friday, August 21, as the federal government on Thursday allowed duty-free imports of 10 lakh tonnes of uncooked sugar beneath a tariff fee quota until October 31 amid rising costs of the sweetener in native markets.
The transfer is aimed toward enhancing home availability and capping worth rise.
To regulate costs, the federal government has additionally imposed a stockholding restrict on bulk customers who use greater than 10 tonnes of sugar a month, capping their inventory at 15 days’ consumption.
How sugar shares had been performing
At 12:11 PM, shares of Balrampur Chini Mills had been down 4.92% at ₹729.35 apiece on the NSE. The inventory slipped as a lot as 5.99% to hit a low of ₹721.10.
Dalmia Bharat Sugar and Industries was down 2.92% at ₹493.25 on the NSE, whereas Bajaj Hindusthan Sugar was down 3.77% at ₹22.45, whereas Shree Renuka Sugars was buying and selling 3.9% decrease at ₹25.11 on the NSE.
E I D-Parry (India) Ltd quoted 1.97% decrease at ₹794.30 on the NSE.
Why are sugar shares falling?
Sugar shares are within the crimson in the present day as the federal government’s transfer is predicted to cut back sugar costs, which might damage the profitability of sugar corporations.
Buyers are pricing within the chance that decrease sugar costs may compress margins for sugar producers, which is why shares comparable to Balrampur Chini, Shree Renuka Sugars and Dalmia Bharat Sugar got here beneath promoting strain.
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In easy phrases, extra imports imply extra provide. The federal government has allowed 10 lakh tonnes of duty-free uncooked sugar imports. Which means extra sugar can be accessible in India, lowering the availability scarcity.
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Costs might cease rising: Sugar mills have been benefiting from increased home sugar costs. If imported sugar will increase provide, costs may soften or rise at a slower tempo, resulting in decrease income realisations for mills.
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Inventory restrict curbs hoarding: Bulk consumers can now maintain solely 15 days’ price of sugar inventory, which discourages hoarding and additional eases demand strain.
The federal government order: Intimately
“The import coverage for uncooked sugar is amended to permit 10 lakh MT of duty-free imports beneath Tariff Price Quota (TRQ) until October 31, 2026,” the Directorate Common of Overseas Commerce mentioned in a notification.
The order has come towards the backdrop of a pointy rise in sugar costs, with ex-mill charges hitting document ranges because of a decrease opening inventory forward of the 2026-27 season. The all-India common ex-mill worth rose to ₹5,400-₹5,500 per quintal on Tuesday, up from ₹3,900 a yr earlier, in response to an trade physique.
Retail sugar costs have climbed about 13% year-on-year to ₹52.30 per kg as on August 18, from ₹46.34 a yr in the past, as per client affairs ministry information.
Demand for sugar usually rises between August and November, because the nation celebrates main festivals, comparable to Ganesh Chaturthi, Dussehra, and Diwali.
Meals Minister Pralhad Joshi, in a social media submit, introduced that bulk customers utilizing greater than 10 tonnes of sugar a month won’t be allowed to carry inventory past what they’ll eat in 15 days.
The meals ministry has notified the Sugar (Stockholding Restrict of Bulk Shoppers) Order, 2026, which covers confectioners, comfortable drink producers, meals processing models, sweetmeat sellers and different institutional consumers.
“The proactive step taken by the federal government will instantly dispel hypothesis & guarantee enough provide to customers at affordable and steady costs over the approaching yr,” the meals ministry mentioned in a submit on X.
The order will come into drive from September 1 and stay in impact until November 30.
This follows an earlier order, efficient August 1 to November 30, capping inventory with sugar sellers at 4,000 quintals for 30 days.
The curbs come towards the backdrop of a pointy rise in sugar costs, with ex-mill charges hitting document ranges because of a decrease opening inventory forward of the 2026-27 season. The 2026-27 season will start on October 1.
The all-India common ex-mill worth rose to $5,400-₹5,500 per quintal on Tuesday, up from ₹3,900 a yr earlier, in response to an trade physique.
Different key particulars
A bulk client has been outlined as a confectioner, comfortable drink producer, meals processing unit, sweetmeat vendor or another institutional purchaser with a mean month-to-month consumption of not lower than 10 tonnes during the last one yr, excluding the present month.
The tighter stockholding norm comes amid issues over sugar availability for the 2026-27 season, which begins on October 1. Business estimates put opening shares for the brand new season at 40-42 lakh tonnes, whereas some researchers peg the determine decrease, at 32-35 lakh tonnes — each beneath the estimated home requirement of round 50 lakh tonnes.
With inputs from PTI
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