The move was not a surprise, with elections round the corner as also because of a sustained increase in sugar prices. Although the government had taken measures to rein in sugar prices, they have not had much impact, with wholesale sugar prices gaining 17% in 2016 so far. Industry estimates suggest that the current year’s crop will be lower than last year’s, which should support higher prices. The taxation of sugar and its by-products is an important factor to watch for, as also any threat to rising sugar prices from higher global output. For now, the increase in sugar prices has lifted sugar stocks all around.

Source: Mint November 20, 2016 21:50 UTC