India to Halt Sugar Exports Amidst Rainfall Woes, Global Market Impact Feared


Amidst a rainfall shortage affecting cane yields, India is set to prohibit sugar mill exports in the upcoming season from October. This step, marking a seven-year halt in shipments, could amplify New York and London benchmark prices, fueling concerns about global food market inflation.

Impact on Global Prices and Local Economy

India’s authorities, speaking on condition of anonymity, disclosed their focus on catering to domestic sugar needs and repurposing surplus sugarcane into ethanol due to an anticipated scarcity for export quotas.

This season, only 6.1 million tonnes of sugar were exportable, contrasting with the record 11.1 million tonnes permitted last season. Notably, India had imposed a 20% sugar export tax in 2016.

The shortfall in monsoon rains in major cane-growing regions like Maharashtra and Karnataka has struck hard. Potentially resulting in a 3.3% decrease in sugar production for the 2023/24 season and affecting planting for the following season.

To alleviate soaring local sugar prices, the government temporarily permitted the sale of an additional 200,000 tonnes in August. Acknowledging concerns over food inflation.

The decision could significantly impact the global sugar market. As India’s absence raises the prospect of New York and London benchmark prices escalating further.

Beyond India, factors like lower sugar output in Thailand and limitations from Brazil, a major producer, could compound shipping challenges.

Moreover, recent unpredicted bans on rice and onion exports, coupled with impending state elections. Underscore India’s focus on stabilizing food prices.

Transitioning to a self-sufficiency approach, India’s move to halt sugar exports showcases its dedication to ensuring domestic supply and stable pricing. Although implications for the global market are poised to linger.