Sugar stocks were in focus on Friday after India moved to ease a tightening domestic supply situation by allowing refiners to divert sugar originally meant for export into the local market.
Shares of sugar companies gained in early trade, with Shree Renuka Sugars and EID Parry leading the move. Shree Renuka Sugars rose 2.3% in the latest check, while EID Parry gained 1.91%. Balrampur Chini Mills and Dalmia Bharat Sugar also traded higher.
The trigger was a decision to allow Indian refiners to divert 350,000 tonnes of refined sugar that had been earmarked for overseas markets to domestic buyers, according to people familiar with the matter. The stockpiles could reach the local market within a week, potentially adding enough supply to meet nearly five days of India's total demand.
The move comes as sugar prices have surged amid concerns over domestic availability ahead of the festive season. Retail prices have climbed nearly 40% over the past two months, while wholesale sugar prices recently touched a record high.
India is the world's second-largest sugar producer, but this year's crop has been weaker than expected following patchy rainfall and crop diseases in key producing regions. The government has also allowed 1 million tonnes of duty-free sugar imports as part of efforts to improve availability.
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