Sugar stocks such as Ugar Sugar Works, Upper Ganges Sugar and Dharani Sugars soared up to 20 per cent despite Food Minister Ram Vilas Paswan planning to impose 25 per cent duty on export of sugar.
The move is aimed at ensuring adequate supplies of the sweetener in the domestic market as international prices of sugar are rising and therefore local sugar exporters may increase the export of sugar to make profit.
Ugar Sugar stock hit the upper circuit to rise 19.90 per cent, while Upper Ganges rallied as much as 16.06 per cent. Stock of Dharani Sugars added 9.94 per cent.
Brokerage Angel Broking said if implemented, this will be the first ever implementation of such high export duty on this essential commodity.
Brazil, which is the largest producer of sugar, has seen delayed harvest and this has resulted in 50 per cent rise in sugar prices in the international market. As India is the the second largest producer of sugar and also the largest consumer of the commodity, there is fear that any export from the Indian market can create shortage and subsequent rise in prices.
According to trade sources, sugar exports have become viable now as global prices have increased by 50 per cent in last three months due to disruption in supply from Brazil.
As demand and supply of sugar in India are at par, the government does not want any export from the country.
The country had exported 1.4 million tonnes of sugar so far in the 2015-16 marketing year (October-September).
Retail sugar prices last month had crossed Rs 40 per kg due to 11 per cent fall in domestic sugar output in the ongoing 2015-16 season.
Sugar production in India, the world's second largest producer is estimated to be about 25 million tonnes in 2015-16, as against 28.3 million tonnes last year.
(With inputs from PTI)