In an effort to lower domestic prices by increasing supply ahead of significant state elections, India, the world’s second-largest sugar producer, on Wednesday extended its ban on sugar exports past October.
India’s export ban is expected to drive up benchmark prices in New York and London, where markets are already hovering around multi-year highs. This could lead to concerns about additional global food price inflation.
The Directorate General of Foreign Trade (DGFT) released a notification on Wednesday that said exports of raw sugar, white sugar, refined sugar, and organic sugar would be prohibited after October due to certain codes.
India has been restricting its sugar exports for the last two years. India gave mills export quotas during this period.
India only permitted mills to export 6.2 million metric tons of sugar in the most recent season, which concluded on September 30, after allowing them to sell a record 11.1 million tonnes in 2021/22.
Government officials informed Reuters in August that due to low rains, which had reduced cane yields, the South Asian nation would forbid mills from exporting sugar during the season starting in October, stopping shipments for the first time in seven years.
The export prohibition was anticipated. This time, the government has imposed an indefinite export restriction rather than the customary one-year limit, according to a dealer with a global trade house based in Mumbai.
“It is unlikely to allocate export quotas this year, as its goal is to reduce prices before the elections.”
Prior to the national elections that are scheduled for next year, five Indian states will elect new legislatures next month, starting a process of regional polling.
In July, India shocked consumers by prohibiting the export of popular non-basmati white rice, which was preceded by a ban on broken rice exports the previous year. Onion exports were subject to a 40% duty imposed by New Delhi.
The price of sugar in India is almost at its highest point in over seven years, and because of irregular monsoon rains in Maharashtra and Karnataka, the two states that produce the most sugar, production is expected to fall 3.3% to 31.7 million tons in 2023–2024.
Reference :
Jadhav, R. (2023, October 18). India extends curbs on sugar exports to calm domestic prices. Reuters. https://www.reuters.com/markets/commodities/india-extends-curbs-sugar-exports-calm-domestic-prices-2023-10-18/
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