On the bourses, shares of sugar-producing companies tumbled as much as 6 per cent, leaving investors concerned about the impact of the latest move on growth.
Analysts attribute the current rally in sugar stocks to the latest surge in global sugar prices. US sugar futures rose 4 per cent in a day, 14 per cent in a month, and over 23 per cent in a year.
The sector's near-term performance will continue to be influenced by sugar pricing trends, cane availability-cum-recovery levels, ethanol pricing mechanisms and policy direction, said Balrampur Chini.
Avadh Sugar & Energy and Bajaj Hindustan gained over 6 per cent. Meanwhile, Dwarikesh Sugar Industries, Shree Renuka Sugars, Dhampur Sugar Mills gained up to 5 per cent on NSE in intra-day deals.
Sugar stocks including, Dwarikesh Sugar, and Balrampur Chini fell up to 4 per cent in trade after the government prohibited sugar exports with immediate effect until September 30.