Sugar export restrictions extended in India beyond October 31
The Directorate General of Foreign Trade (DGFT) has announced that the Indian government will extend its restriction on sugar exports past October 31. This decision aims to maintain a steady supply of sugar for domestic use at reasonable prices. However, the restriction won't affect sugar exports to the European Union and the US under CXL and TRQ quotas, as long as they follow the procedures outlined in their respective public notices.
Previous sugar export restrictions and quotas
India, the world's second-largest sugar exporter, had previously categorized sugar as restricted until October 31, to avoid unchecked exports. Indian mills were permitted to export only 6.1 million tons of sugar during the season ending on September 30. This followed a record export of 11.1 million tons in the previous season. The last time India imposed a tax on sugar exports was in 2016, when a 20% tax was introduced to limit overseas sales.
Impact of monsoon rains on sugar production
Weather department data reveals that monsoon rains in Maharashtra and Karnataka, India's leading sugarcane-producing states, have been up to 50% below average this year. These two states contribute to over half of India's total sugar production. Consequently, the Indian Sugar Mills Association (ISMA) forecasts a 3.3% decrease in sugar production for the 2023/24 season, totaling 31.7 million tons.
Implications for India's sugar industry
The extended sugar export restrictions could have significant consequences for India's sugar industry. With reduced production due to unfavorable weather conditions and limited export opportunities, mills may face financial challenges. On the flip side, domestic consumers could benefit from stable sugar supplies and prices. The government's decision underscores the delicate balance between supporting local industries and ensuring sufficient resources for the local population.
