SUGAR STOCKS CRASH UP TO 5% AS INDIA ALLOWS DUTY-FREE IMPORTS FOR FIRST TIME IN NEARLY A DECADE

Sugar stocks came under heavy selling pressure in early trade on August 21 after the government permitted duty-free imports of 1 million metric tonnes of raw sugar. The move is aimed at improving domestic supplies and bringing down record-high sugar prices ahead of the upcoming festival season. Among the major losers, Dalmia Bharat Sugar declined 5.47%, while Dwarikesh Sugar Industries fell 4.32%. Balrampur Chini Mills dropped 4.15%, and Triveni Engineering & Industries slipped 3.82%. The decline in sugar stocks came despite the broader market trading largely flat with a positive bias. On Thursday, the government announced that it would allow duty-free imports of 1 million metric tonnes of raw sugar until October 31. India typically levies a 100% import duty on sugar. The move marks India’s first major sugar import intervention in nearly a decade and comes amid tightening domestic supplies and a sharp rise in prices. Sugar prices have climbed nearly 40% over the past two months, driven by lower production. For domestic sugar producers, increased imports could put pressure on realisations by improving market availability and potentially moderating prices. However, global sugar markets reacted positively to the development. London white sugar futures and New York raw sugar futures surged as much as 4% after the announcement, as India’s return to the global market is expected to create a significant source of additional demand. Sugar stocks had rallied strongly over the previous two trading sessions as tight domestic supplies and record-high prices raised expectations of improved realisations for producers. The rally gained further momentum on Thursday, with Balrampur Chini Mills surging 18%, Dwarikesh Sugar Industries climbing nearly 14%, while several other sugar stocks advanced between 7% and 10%.