India may ban sugar exports for first time in 7 years: Report

Mangalore Today News Network

New Delhi, Aug 23, 2023: India may ban sugar exports for the next season starting in October due to diminished cane yields caused by insufficient rainfall, reported news agency Reuters citing three government sources.

 

This anticipated move follows a lack of rain impacting top cane-producing areas, with monsoon rains in Maharashtra and Karnataka being up to 50 per cent below average.

A ban on Indian sugar exports, which has not happened in seven years, could drive up global benchmark prices, potentially increasing inflation in global food markets.
Drastic measures amid inflation

The possibility of such a decision arises as India faces concerns over food inflation, with retail inflation reaching a 15-month high of 7.4 per cent in July, and food inflation climbing to 11.5 per cent, the highest in over three years.

The country’s sugar production might drop by 3.3 per cent to 31.7 million tonnes in the upcoming 2023/24 season. This comes after India allowed mills to export only 6.1 million tonnes of sugar in the current season, compared to 11.1 million tonnes in the previous season.

Amid these developments, Indian authorities are prioritising local sugar needs and ethanol production from surplus sugarcane.

"Our primary focus is to fulfil local sugar requirements and produce ethanol from surplus sugarcane," a government source told the news agency. "For the upcoming season, we will not have enough sugar allocate for export quotas,” the source added.

The government aims to ensure sufficient supplies and stable prices within the country, a concern given the potential impact on food inflation.

The move to halt sugar exports follows similar actions, such as a recent ban on non-basmati white rice exports and the imposition of a 40 per cent duty on onion exports. “Food inflation is a concern. The recent increase in sugar prices eliminates any possibility of exports," said another government source.

These measures are part of broader efforts to manage food prices ahead of upcoming state elections.

The constrained output in Thailand and the inability of major producer Brazil to fully compensate for the shortfall could exacerbate global supply concerns. Meanwhile, India’s decision to halt sugar exports is poised to have significant implications on global sugar markets and food prices.

Courtesy: India Today