Sugar stocks slide following reports on export restrictions
时间:2024-06-26 09:00:02 阅读(143)
Sugar stocks on Tuesday came under selling pressure after media reports indicated that restrictions were likely to be imposed on exports to safeguard food supplies in the country.
Shares of Shree Renuka Sugars slumped as much as 13.8% in intra-day trade. They, however, pared some of the losses to close at `44.85 on the BSE, down 6.7%. While the stock of Balrampur Chini Mills slid 5.7% on Tuesday, stocks of Bajaj Hindusthan Sugar, Mawana Sugars and Ugar Sugar Works fell 5% each. In intra-day trade, shares of Uttam Sugar Mills, Dwarikesh Sugar and Balrampur Chini Mills had fallen nearly 10%.
The government’s decision to limit the export of sugar to 10 MT is not very surprising as the move comes against the backdrop of rising inflation and is meant to keep tabs on the rising domestic food prices, said DRE Reddy, CEO and managing partner, CRCL LLP, adding that the decision is in line with the Centre’s move of limiting the export of wheat. “This will impact the global sugar supply as India is the second-largest exporter of sugar after Brazil, ” said Reddy.
The frantic rally in sugar stocks has reached levels rare for any stock or sector. According to Bloomberg, an index of 15 top sugar stocks is trading above the 3-standard deviation line over an eight-year period, buoyed by a record export outlook and prospects of ethanol being a new source of energy. On an average, sugar stocks have come off about 9% during the last two sessions, yet many of them like Dwarikesh Sugar, Uttam Sugar Mills and Mawana Sugars are up more than 50% between January and now. In fact, shares of Ugar Sugar Works have rallied as much as 83.4% year-to-date.
That compares 7.2% fall clocked by the benchmark Sensex during the same period. The Sensex on Tuesday closed 0.43% lower at 54,052.61 points.
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