Shares of sugar companies, including Balrampur Chini Mills and Dhampur Sugar Mills, are likely to be in focus after the Indian government announced a shift in its sugar export policy from 'restricted' to 'prohibited.' This ban, effective immediately, applies to all forms of sugar exports, including raw, white, and refined sugar, and will remain until September 30 or further notice. The decision comes as India, the world's second-largest sugar exporter, grapples with lower production levels due to weakened cane yields across key regions. The government had previously allowed the export of 1.59 million metric tonnes of sugar, anticipating that production would exceed domestic demand. However, current projections indicate that sugar production will fall below consumption for a second straight year, leading to concerns about supply. The ban does allow for shipments already in the export pipeline under certain conditions, while exports to the European Union and United States under tariff rate quota agreements will continue. The anticipated sugar production for the 2025-26 season is around 275 lakh tonnes, with domestic demand estimated at 280 lakh tonnes, resulting in closing stocks of approximately 45 lakh tonnes, the lowest since 2016-17. This situation raises concerns for the upcoming sugar season due to potential impacts from El Niño and fertilizer shortages.