Sugar price hike likely as India to restrict exports

India plans to restrict sugar exports for the first time in six years to prevent a surge in domestic prices and could cap this season's exports at 8 million tonnes, Reuters reports quoting Indian government and industry sources.

An announcement could come early next month, they said.

Shares in sugar manufacturers slid on the news, with Dhampur Sugar Mills and Balrampur Chini each tumbling 5% and Dwarikesh Sugar losing 6%.

"Sugar output is going to be a record high, but stocks are depleting fast because of exports. Uncontrolled exports could create scarcity and local prices could spike during festive season," said a senior government official with knowledge of the matter who asked not to be identified.

Meanwhile, Traders of Bangladesh said, they are trying to overcome the situation.

We will try to stock more sugers before India stops export. We are also trying to devise the next step to overcome the situation,” said Shop owners’ association president Helal Uddin.

He also said that, as the month of Ramadan is appearing the price of sugar is likely to hike as usual like other products.