India, a top sugar exporter, plans to cease sugar exports beginning this October. This shift stems from subpar monsoon rains affecting cane yields, marking the first stop in sugar shipments from India in seven years, according to government insiders.
India’s absence from the global sugar scene could push prices higher in prominent trading centers like New York and London. Sugar prices in these cities are nearing multi-year peaks, intensifying fears of increased costs in global food commodities.
A government representative stated, “Our primary focus is to fulfill 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 records show India approved the export of merely 6.1 million tonnes of sugar this season until September 30, a drop from the 11.1 million tonnes the previous season. Notably, India introduced a 20% export tax on sugar in 2016.
Monsoon rains, crucial for Indian agriculture, have been inconsistent and are 50% lower in primary cane regions like Maharashtra and Karnataka. These regions account for a majority of India’s sugar output. This unpredictable rain behavior could cut sugar production for the 2023/24 season and reduce planting in the 2024/25 season.
Domestic sugar prices reached a nearly two-year peak recently, prompting the government to approve an extra 200,000 tons for sale in August.
Another government figure highlighted rising prices, stating, “Food inflation is a concern. The recent increase in sugar prices eliminates any possibility of exports.” India’s retail inflation surged to 7.44% in July, its peak in 15 months, while food inflation hit a high of 11.5%.
Predictions suggest a 3.3% decline in sugar production for India in the 2023/24 season, concluding at 31.7 million tonnes.
India’s protective measures for local markets and consumers are evident. The recent prohibition on non-basmati white rice exports and the 40% tariff on onion exports indicate New Delhi’s strategies to maintain food price stability, especially with upcoming state elections.
India’s choice may affect the global sugar landscape. Thailand predicts reduced output, and Brazil, another key player, won’t be able to fill the gap. Global sugar consumers could face unpredictable futures.
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