India to ban sugar exports after patchy rains hit production: report

Mumbai/New Delhi: India may ban export of sugar from October after poor rains cut cane yields, Reuters reported.

The decision that comes first time in seven years can set off concerns in global markets, further escalating inflation.

Since India is a major exporter of sugar, the ban could ‘increase benchmark prices in New York and London’, according to the report.

A source in the government reportedly said India’s ‘primary focus is to fulfil local sugar requirements and produce ethanol from surplus sugarcane’.

‘For the upcoming season, we will not have enough sugar to allocate for export quotas,’ the source reportedly said.

Where India exported 11.1 million tonnes of sugar last season, now mills are asked to export only 6.1 million tonnes.

The government has imposed a 20 percent tax on sugar exports to discourage overseas sales.

Maharashtra and Karnataka together produce more than half of India’s total sugar output.

However, sugar growing districts of these two states received only 50% below average monsoon rains so far this year.

Poor rains can lead to cut in output in the 2023/24 season as well, the report said citing an industry expert.

Patch rains are more likely to impact on planting for the 2024/25 season as well.

After sugar prices peaked to two years high this week, the government allowed mills to sell 200,000 more tonnes in August.

Only weeks ago India put a ban on non-basmati rice exports, causing mayhem in global markets.

The decision also had to do with the impact of patchy monsoon, which promoted the government to store up enough for domestic requirements.

The last week a 40 percent duty was slapped on onion exports in order to becalm food prices head of polls later this year.