On Wednesday, the government announced its decision to prolong constraints on the export of various sugar varieties, which encompass raw sugar, white sugar, refined sugar, and organic sugar. This strategic move is driven by the aim of augmenting domestic supplies in order to mitigate soaring domestic prices.
This announcement was disseminated via an order put forth by the Directorate General of Foreign Trade (DGFT) and supersedes the earlier October 31 deadline.
However, it is worth noting that the latest restrictions do not apply to sugar exports directed towards the European Union and the United States.
As far back as August, government sources, as reported by Reuters, had revealed the government's intention to prohibit sugar mills in the country from engaging in sugar exports in the upcoming season, commencing in October. This marked the first time in seven years that such a restrictive measure had been instituted.
It is noteworthy that India had maintained restrictions on sugar exports for a continuous period of two years.
According to a dealer based in Mumbai, this extension of export restrictions was somewhat anticipated.
"This time, the government has imposed an indefinite export restriction, unlike the usual one-year limit," the dealer explained.
"It is improbable that export quotas will be allocated this year, as the government's objective is to temper prices in the lead-up to the elections," the dealer added.
This protracted restriction on sugar exports coincides with impending assembly elections in five states and the impending Lok Sabha elections, which hold considerable importance.
It is pertinent to acknowledge that sugar prices in the country currently hover at their highest levels in over seven years and may encounter further increases. This projection is primarily due to the estimated production decline of 3.3 percent, amounting to 31.7 million tonnes in FY24, mainly attributable to erratic monsoon rains in prime sugar-producing states such as Maharashtra and Karnataka.
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