India yesterday extended restrictions on sugar exports beyond October 31, as the world’s second-largest sugar producer tries to lower domestic prices by increasing supplies ahead of national elections. A decision that is likely to increase global sugar prices when sugar prices are already trading at their highest levels in years.
Exports of raw sugar, white sugar, refined sugar and organic sugar under certain codes will be restricted after October, according to a notification issued by the Directorate General of Foreign Trade (DGFT) on Wednesday. Sugar export restrictions in India have been in effect for two years. During this period, India allocated export quotas to factories. In the last season ending on September 30, India allowed mills to export just 6.2 million tonnes of sugar, (MT) after allowing them to sell a record volume of 11.1 Mt in 2021/22.
“Export restrictions were to be expected. Instead of the usual one year restriction, this time the government imposed export restrictions for an indefinite period“, shown to Reuters a trader based in Mumbai. Adding “It is unlikely the government will allocate an export quota this year as the aim is to reduce prices before the election“. Five Indian states will elect new legislatures next month, kicking off a regional election process ahead of national elections scheduled for next year.
Sugar prices in India are near the highest level in over 7 years and production is expected to fall by 3.3% to 31.7 Mt in 2023/24 due to scattered monsoon rains in major sugar producing states such as sugar cane, Maharashtra and Karnataka .
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