Due to decreased cane yields brought on by insufficient rainfall, India may ban sugar exports for the upcoming season beginning in October, according to news agency Reuters, which cited three government sources.
This anticipated action comes after top cane-producing regions were negatively impacted by a lack of rain, with monsoon rains in Maharashtra and Karnataka being up to 50% below average.
The seven-year absence of an export embargo on Indian sugar could result in an increase in world benchmark prices and possibly higher food inflation rates.
Considering that food inflation in India has reached 11.5 percent and retail inflation hit a 15-month high of 7.4 percent in July, it is possible that such a decision will be made.
The nation's sugar output in the upcoming 2023–2024 season could decline by 3.3% to 31.7 million tonnes. Indian mills were only permitted to export 6.1 million tonnes of sugar this season as opposed to 11.1 million tonnes the season before.
Indian authorities are giving local sugar requirements and ethanol production from extra sugarcane priority in the midst of these changes.
According to a government source, "Our main focus is to satisfy local sugar requirements and produce ethanol from surplus sugarcane." "For the upcoming season, we will not have enough sugar allocated for export quotas," the insider continued.
Given the potential effect on food inflation, the government wants to ensure enough supplies and stable pricing throughout the nation.
The decision to stop sugar exports comes after similar moves, including a recent prohibition on the sale of non-basmati white rice and the imposition of a 40% levy on the export of onions. Food price inflation is a problem. Any chance of exports is now impossible due to the recent surge in sugar prices, according to a different government source.
These actions are part of broader initiatives to control food costs before forthcoming state elections.
Concerns about the worldwide supply could be made worse by Thailand's limited production and Brazil's inability to fully make up the shortage. India's decision to stop sugar exports, meantime, is expected to have a big impact on food prices and sugar markets around the world.
