India Likely to Ban Sugar Export For First Time in 7 Years, Here’s Why

This move to ban sugar export from the Centre comes due to a lack of rain impacting top cane-producing areas, with monsoon rains in Maharashtra and Karnataka being up to 50 per cent below average this season.

Written by: India.com Business Desk Edited by: Manmath Nayak

Updated: August 24, 2023, 8:12 AM IST

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Why Indian wants to ban sugar export from October?

New Delhi: With the lack of rain impacting cane production in the country, India is expected to ban sugar export starting from October, news agency Reuters reported citing three government sources. Notably, the ban on Indian sugar exports, which has not happened in seven years, could drive up global benchmark prices, increasing inflation in global food markets.

This expected move from the Centre comes due to a lack of rain impacting top cane-producing areas, with monsoon rains in Maharashtra and Karnataka being up to 50 per cent below average.

The possibility of such a drastic decision from the Central government also arises as the country faces concerns over food inflation, with retail inflation reaching a 15-month high of 7.4 per cent in July, and food inflation climbing to 11.5 per cent, the highest in over three years.

The sugar production in India is also expected to drop by 3.3 per cent to 31.7 million tonnes in the upcoming 2023/24 season. The development comes after the country allowed mills to export only 6.1 million tonnes of sugar in the current season, compared to 11.1 million tonnes in the previous season.

Amid these developments, the Central government said it is prioritising local sugar needs and ethanol production from surplus sugarcane.

“Our primary focus is to fulfil local sugar requirements and produce ethanol from surplus sugarcane,” a government source told the news agency. “For the upcoming season, we will not have enough sugar to allocate for export quotas,” he added.

Notably, India allowed mills to export only 6.1 million tonnes of sugar during the current season to September 30, after letting them sell a record 11.1 million tonnes last season. And in 2016, India imposed a 20% tax on sugar exports to curb overseas sales.

Currently, the Central government is also making plans to ensure sufficient supplies and stable prices within the country, a concern given the potential impact on food inflation.