India Extends Restrictions on Sugar Exports to Stabilize Domestic Prices
Published on: October 19, 2023.
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India Extends Sugar Export Restrictions to Lower Domestic Prices
India has decided to extend its restrictions on sugar exports beyond October in an effort to bring down domestic prices ahead of key state elections. This move comes as the country, the world’s second-largest sugar producer, aims to increase supplies and prevent further inflation in food prices globally.
According to a notification issued by the Directorate General of Foreign Trade (DGFT), the export of raw sugar, white sugar, refined sugar, and organic sugar under certain codes will continue to be restricted after October. These export restrictions have been in place for the past two years, with India allocating export quotas to mills during this time.
In the previous season, India permitted mills to export only 6.2 million metric tons of sugar, compared to a record 11.1 million tonnes in the 2021/22 season. However, due to a lack of rain and reduced cane yields, the government sources had already indicated in August that mills would be banned from exporting sugar in the coming season, starting in October.
Instead of the usual one-year limit, the government has imposed an indefinite export restriction on sugar this time. It is unlikely that export quotas will be allocated this year as the government’s primary goal is to reduce prices before the upcoming state elections.
This move is crucial since five Indian states will be electing new legislatures next month, marking the beginning of regional polls in the run-up to the national elections next year. To further control the price in the domestic market, India had previously imposed bans on the export of widely consumed non-basmati white rice in July and broken rice exports last year. Additionally, a 40% duty was imposed on onion exports.
Sugar prices in India are currently at their highest level in over seven years, and the production forecast for 2023/24 suggests a 3.3% drop to 31.7 million tons due to patchy monsoon rains, particularly in Maharashtra and Karnataka, the top cane-growing states.
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