The Director General of Foreign Trade (DGFT), in its latest order today, extended restrictions on the export of sugar beyond October 31, until further orders.
This essentially means that the commodity will continue to be in the restricted category. While no sugar quota for exports has yet been announced, thereby banning exports for now, an official order allowing some quantity may follow whenever government perceives the situation to have improved.
Moneycontrol had on September 28 reported that India is likely to ban sugar exports during the upcoming season with a notification for the same likely in the first week of November.
The extension of restriction is, however, not applicable to sugar being exported to the EU and the US, the notice further stated.
India, world's second-largest sugar exporter last year had placed sugar in a restricted category until October 31, 2023 'to prevent uncontrolled export of sugar and with a view to ensure sufficient availability of sugar for domestic consumption at a reasonable price.'
It allowed mills to export only 6.1 million tonnes of sugar during the current season ending on September 30, after letting them sell a record 11.1 million tonnes last season.
Below-normal showers in the top cane-growing districts in the western state of Maharashtra and the southern state of Karnataka, both of which account for more than half of India’s total sugar output, had been as much as 50 percent below average till August this year.
While the rainfall situation has since improved with the all-India deficit coming down from 10 percent on August 31 to 5 percent on September 25, fears of a fall in production cannot be erased.
Meanwhile, domestic prices of sugar have remained elevated, up about 2.5 percent in October, compared to a month back, according to ministry of consumer affairs data. The Consumer Price Inflation (CPI) for the commodity was recorded at 4.73 percent in September.
International prices of the commodity have also remain elevated with the FAO Sugar Price Index averaging 148.2 points in August, up 1.9 points (1.3 percent) from July and as much as 37.7 points (34.1 percent) from its level in the same month last year.
The increase in world sugar prices was mainly triggered by heightened concerns over the impact of the El Niño weather phenomenon on global production prospects, FAO says. “In India, below-average rains in August were detrimental to sugarcane crop development,” it has noted.
Also Read: India likely to ban sugar exports in new season beginning October
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