Stock prices of leading sugar producers such as Shree Renuka Sugars, Balrampur Chini Mills and Bajaj Hindusthan were up by between 1 and 3 per cent on Wednesday, after the Empowered Group of Ministers allowed sugar producers to export 5 lakh tonnes of sugar, lifting a clampdown on exports.

Though the government's decision to allow exports under the open general licence may be perceived as a positive signal on the policy front, it may not make a very big difference to the profits of the major sugar producers in the January-March quarter for a few reasons.

One, the window of opportunity available to Indian sugar producers to take advantage of the export relaxation is small.

Global sugar prices have cooled substantially from their highs of February, narrowing the differential between export and domestic sugar realisations. Industry estimates peg ex-factory realisations for Indian refined sugar that is exported at about Rs 28,150 a tonne, not very much higher than the Rs 27,000 a tonne that domestic sales fetch.

Further softening of global sugar prices too cannot be ruled out given that news of Indian exports usually has an impact on global sugar markets.

Two, with the Brazilian sugar harvest likely to trickle in from end-March, the time available for domestic mills to capitalise on exports also appears short.

The export opportunity for India's sugar producers therefore is considerably less attractive today, than it was a few months ago.

With the 5 lakh tonne of exports likely to be apportioned between mills based on their average three-year output, benefits to individual producers are also likely to be capped.

In fact, it is sugar mills who managed to export consignments earlier this year to fulfil their re-export obligations under the advance licensing scheme, who may have benefitted the most from the soaring global sugar prices a month ago.

Players such as Sakthi Sugars, Thiru Arooran Sugars and Simbhaoli Sugars, the key holders of advance licences, may have been the ones to make the most of the opportunity.

(With inputs from Harish Damodaran, New Delhi)

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