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The Indian government is likely to impose a ceiling on sugar exports for the second consecutive year starting this October to ensure ample domestic supplies and keep a cap on local prices. On Friday, the majority of sugar stocks were under selling pressure.

Industry and government sources said that the country could cap exports of the sweetener at 6 million to 7 million tonnes in the 2022/23 October-September season, about one-third less than the total to be shipped out in the current season, reported by Reuters.

Traders told Reuters that the curbs on exports by India could further lift benchmark white sugar prices, which are already trading near 5-1/2 year highs.

Lower sugar output in Brazil and multi-year high crude oil prices are some of the factors that have underpinned global sugar prices this year. Notably, higher crude oil prices motivate sugar mills in diverting more sugarcanes to produce ethanol for blending into gasoline.

A senior government official told Reuters that there is a need to regulate exports to avoid any kind of panic in the market

Reuters said sources expected next season's export cap to be set between 6 million and 7 million tonnes, the exact quantity will be fixed near the start of the 2022/23 season.

However, before fixing the quota, the Centre will look at the performance of the monsoon.

As per weather office data, monsoon rains in sugarcane growing areas such as Maharashtra, which is the country's biggest sugar producer, were 60% below average since the start of the rainy season this month.

Last month, New Delhi had levied restrictions on sugar exports for the first time in six years with a limit for this season of 10 million tonnes.

In the current season, record exports could bring down inventories to 6.5 million tonnes on October 1, when the next 2022/23 season commences, compared to 8.2 million tonnes a year earlier, the industry and government estimated.

On Friday, sugar stocks were in deep red on BSE. At around 2.36 pm, Dhampur Sugar Mills dived nearly 4% and traded at 224.40 apiece after hitting an all-time low of 222.55 apiece in the early session.

At the same time, Eid Parry shares slipped 4.65% and traded at 491.90 apiece, Shree Renuka Sugars traded at 44.90 apiece down by 1.75%, Dalmia Bharat Sugar and Industries at 322.35 apiece lower by 3.65%. Balrampur Chini Mills shed 4.54% and traded at 366.15 apiece.

Meantime, Triveni Engineering & Industries shares traded at 234.40 apiece down by 2.64%, and Rajshree Sugars dipped by 3.35% and traded at 31.70 apiece. Sakthi Sugars slipped 1.61% and performed at 15.30 apiece, Bajaj Hindustan Sugar dropped 3.64% and traded at 12.45 apiece. Dwarikesh Sugar Industries traded flat but in the red.

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