Winning Bizness Desk
Mumbai. The Indian government is planning to stop sugar exports for the first time in six years. The government is doing this to prevent a jump in domestic prices. According to a report, the government may limit exports this season to 10 million tonnes. India is the world's largest producer of sugar and the second largest exporter after Brazil. Its top customers include Bangladesh, Indonesia, Malaysia and Dubai.
Sugar stocks tumbles
After this news, most of the stocks related to sugar tumbled. Shree Renuka Sugar's stock lost nearly 14% and Balrampur Chini nearly 10%. However, there was some recovery in them after the fall. Despite this, most sugar stocks closed with a fall of 5%. "The government is planning to limit sugar exports to 10 million tonnes for the marketing year ending September," report said quoting a person familiar with the matter. The aim is to ensure that there is enough stock before the next sugar season begins in October.
India has a huge surplus
The government's plan to limit sugar exports seems too precautionary. This is because the domestic supply of sugar is abundant. According to the Indian Sugar Mills Association, India is expected to produce 35 million tonnes and consume 27 million tonnes this season. There is a surplus of 16 million including the last season's reserves of about 8.2 million tonnes.
Food prices skyrocketing
After Russia's invasion of Ukraine, food prices have skyrocketed and governments around the world have banned the export of these items to prevent the price of essential commodities from rising in their country. Malaysia is going to stop the export of chicken from June 1. Indonesia recently temporarily banned palm oil. India has also banned the export of wheat. Serbia and Kazakhstan have imposed quotas on grain shipments.