In light of firm global prices, the Centre cut the sugar export subsidy from Rs 6,000 per tonne to Rs 4,000 per tonne with immediate effect on Thursday.
Sugar stocks fell 5% in Friday's trading after the government decided to reduce sugar export subsidies for the current season, which runs until September 30.
According to the Ministry Of Consumer Affairs, Food And Public Distribution, the government subsidy on sugar exports is now Rs 4,000 per tonne. The government had previously approved Rs 6,000 per tonne in subsidies to enable cash-strapped mills to export 6 million tonnes of sugar this season.
Bajaj Hindusthan Sugar fell 4.63 percent to Rs 10.92 apiece, Balrampur Chini NSE -2.85 percent fell 2.16 percent to Rs 306.05, and Shree Renuka Sugars fell 2,01 percent to Rs 14.59 apiece.
Simbhaoli Sugars was down -4.84 percent, which hit the 5% lower circuit limit at Rs 14.79, was among the worst-affected stocks. Dharani Sugars, which reached its circuit limit at Rs 11.55, was in a similar situation. Sakthi Sugars dropped 3.08 percent to Rs 12.60 per share.
According to industry reports, sugar production in India has reached more than 30 million tonne so far in the 2020-21 marketing year, up from 27.42 million tonne in the previous year.