Read on the application
The Indian government may ban sugar exports in the upcoming season starting from October. The government can order sugar mills not to export sugar. If this happens, it will be the first defeat in seven years when India bans sugar exports. Its main reason is rain. Sugarcane yield has decreased due to lack of rain. News agency Reuters has given this information citing three government sources. Benchmark prices in New York and London are likely to rise if India remains absent from the global sugar market. Sugar prices here are at multi-year highs. This will further increase the possibility of inflation in global food markets.
“Our primary focus is to meet domestic sugar requirements and produce ethanol from surplus sugarcane. For the next season, we will not have enough sugar to allocate the export quota,” a government source said on condition of anonymity. India has allowed sugar mills to export only 6.1 million tonnes of sugar in the current season till September 30, while they were allowed to sell 11.1 million tonnes in the previous season. Earlier in 2016, India imposed a 20% tax on sugar exports to curb foreign sales.
According to the Meteorological Department, the top sugarcane producing districts are in the western state of Maharashtra and the southern state of Karnataka. Monsoon Rainfall has been 50% below average so far this year. More than half of India’s total sugar production comes from these districts. An industry official, speaking on condition of anonymity, said low rainfall would reduce sugar production in the 2023/24 season and also lower plantings in the 2024/25 season.
Domestic sugar prices rose this week to their highest level in nearly two years, allowing the government to sell an additional 200,000 tonnes to mills in August. Another government source said, “Food inflation is a matter of concern. The recent rise in sugar prices has killed any possibility of exports.” Retail inflation in India hit a 15-month high of 7.44% in July and food inflation reached 11.5%. This is the highest in three years. India’s sugar production may decline by 3.3% to 31.7 million tonnes in the 2023/24 season.
“We have allowed mills to export large quantities of sugar during the last two years. But we also have to ensure adequate supply and stable prices,” said a third government source. India shocked buyers last month by banning exports of non-basmati white rice. India also imposed a 40% duty charge on onion exports last week. Another reason to keep inflation under control is the state elections due later this year. The government is trying to reduce food prices ahead of the elections.