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India extends curbs on sugar exports to calm local prices

India has decided to extend its restrictions on sugar exports beyond October in an effort to stabilize domestic prices, particularly in the lead-up to key state elections. This decision could potentially affect global sugar prices and raise concerns about increased food price inflation worldwide.

Background on India’s Sugar Export Restrictions

  • India has maintained restrictions on sugar exports for the past two years.
  • In the previous season, ending on September 30, India allowed mills to export only 6.2 million metric tons of sugar, a significant decrease from the 11.1 million tonnes permitted in 2021/22.
  • These export quotas were allocated to sugar mills.

Current Extension of Export Restrictions

  • The Directorate General of Foreign Trade (DGFT) in India has extended the restrictions on exporting various types of sugar, including raw sugar, white sugar, refined sugar, and organic sugar beyond October.

Implications on Global Sugar Prices

  • The extended export restrictions in India could potentially lead to increased benchmark sugar prices in New York and London.
  • Global sugar markets are already experiencing multi-year highs, which raises concerns about inflation in food prices worldwide.

Reason for the Extension

  • The primary reason for this extension is to increase the supply of sugar in India, thereby helping to lower domestic prices. This move is strategically timed ahead of key state elections.
  • India has chosen to impose an indefinite export restriction, in contrast to the usual one-year limit, to achieve its price reduction goals.

Upcoming State Elections and National Elections

  • Five Indian states are set to hold elections next month, which marks the beginning of regional polls leading up to the national elections scheduled for the following year.
  • The Indian government’s decision to curb sugar exports is seen as a way to influence prices before these elections.

Previous Bans and Restrictions

  • India previously surprised buyers by banning the export of widely consumed non-basmati white rice in July.
  • Broken rice exports were also banned the previous year, and a 40% export duty was imposed on onions.

Impact on Indian Sugar Production

  • Sugar prices in India have reached their highest levels in over seven years.
  • In the 2023/24 season, sugar production is expected to decline by 3.3% to 31.7 million tons due to inconsistent monsoon rains in Maharashtra and Karnataka, which are major cane-growing states.


Here’s a simplified table summarizing key points:

Topic Details
Background on Export Restrictions India has restricted sugar exports for two years, with last season allowing only 6.2 million metric tons of sugar to be exported.
Current Extension of Restrictions India’s DGFT has extended restrictions on exporting various sugar types beyond October.
Implications on Global Prices Extended restrictions could raise benchmark sugar prices globally, causing food price concerns.
Reason for Extension India aims to increase domestic sugar supply and reduce prices ahead of state elections.
Upcoming Elections State elections precede national elections, influencing the timing of export restrictions.
Previous Bans and Restrictions India previously banned rice and imposed export duties on onions, impacting trade.
Impact on Sugar Production Sugar prices are at a 7-year high, and production is expected to decrease due to poor monsoon.

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