Ban on India's sugar exports may stay in place till at least October: Official

The world’s second-largest sugar producer, India extended a ban, first placed in June 2022, on exports of sugar beyond October 2023 correctly anticipating lower harvest due to an erratic monsoon.

India is unlikely to ease restrictions on exports of sugar until at least October and any review on the ban will only be conducted after reviewing the progress of planting for the next season, a government official said, on condition of anonymity.

The world’s second-largest sugar producer, India extended a ban, first placed in June 2022, on exports of sugar beyond October 2023, correctly anticipating a lower harvest due to erratic monsoon rainfall. The move was prompted by the need to keep a check on domestic prices.

But despite restrictions on outbound shipments, the average retail price of a kilogram of sugar at Rs 44.41 as on June 30, 2024, was actually slightly higher than the Rs 42.74 seen on the same day last year.

"The rain forecast is good so far, but figures on plantation will decide which way the review will go. On sugar there won’t be an immediate review. The ban has helped limit the price rise on items. Without export curbs, prices may have been much higher than what we see now," the official added.

Though India’s rainfall deficit further narrowed to 10.9 percent until June 30, compared with 13.8 percent on the previous day, the month in question ended with deficit rainfall.

Rainfall is crucial for India's cane crop as it helps replenish groundwater used for irrigation. Drier conditions threaten the production outlook, which may place more pressure on containing rising food costs.

A report by the US Department of Agriculture’s Foreign Agricultural Service back in April said that India's sugar production in marketing year 2024/2025 (October/September) is expected to reach 34.5 million tonnes against a forecast of 34 million tonnes in the current cycle.

However, the country's sugar exports are projected to decrease from 4.6 million tonnes to 3.7 million tonnes, largely due to anticipated government restrictions aimed at ensuring domestic demand is met and the diversion of some sugar for ethanol production, the report said.

India's sugar exports rose 291 percent from $1,177 million in 2013-14 to $4,600 million in 2021-22. Shipments in value terms in FY22 alone jumped 65 percent over the previous year.

The country exported the commodity to 121 countries with the largest share going to Indonesia, Bangladesh, Sudan and United Arab Emirates, in that order.