Sugar stocks came under pressure on Friday after the government approved duty-free imports of 1 million metric tonnes of raw sugar, triggering concerns over higher domestic supplies and easing sugar prices.
Dalmia Bharat Sugar & Industries led the decline, falling as much as 6.50%, while Balrampur Chini Mills dropped as much as 5.23%. Triveni Engineering & Industries declined 4.31%, followed by Bajaj Hindusthan Sugar at 4.29% and Shree Renuka Sugars was down 3.25% intraday as of 9:25 am.
The government move comes as domestic sugar prices have surged nearly 40% over the past two months, according to the information provided. Tighter supplies and lower production have contributed to the price increase, raising concerns ahead of the festive season when demand for sugar typically picks up.
The Commerce Ministry notification allows the duty-free imports until October 31, covering the period ahead of the peak festive season. India is the world's largest sugar consumer and is turning to imports after nearly a decade as domestic prices remain elevated.
India's return to the import market could also have implications beyond its domestic sugar industry. Analysts expect increased Indian buying to provide support to benchmark sugar prices in London and New York, as the country's large import requirement adds to international demand.
The decision marks a significant shift for India, which has generally relied on domestic production to meet its large consumption needs. The current supply squeeze, however, has changed the balance and increased the need for overseas supplies.
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