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Govt restricts sugar exports at 10 million tonnes for 1st time in 6 years

By Priyanka Verma 
Updated Date

Mumbai: India has imposed restrictions on sugar exports for the primary time in six years by way of capping this season’s exports at 10 million tonnes, a government order said, to prevent a surge in domestic prices after mills sold a record volume on the world market.

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“Taking into consideration of the unprecedented growth in exports of sugar and the need to maintain sufficient stock of sugar in the country as well as to safeguard interests of the common citizens of the country by keeping prices of sugar under check, Government of India has decided to regulate sugar exports from June 1, 2022,” the food ministry said.

“The government is worried about food inflation, and that’s why it is trying to ensure that enough sugar remains in the country to cater to the festival season,” said a Mumbai-based dealer with a global trading firm.

Exporters also said the decision to allow mills to export 10 million tonnes would help India sell a reasonably big quantity of sugar on the world market.

India is the world’s biggest sugar producer and the second biggest exporter behind Brazil.

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Benchmark white sugar prices in London jumped more than 1% after India’s decision.

Initially, India planned to cap sugar exports at 8 million tonnes, but the government later decided to allow mills to sell some more sugar on the world market as production estimates were revised upwards.

As per the new guideline, which were issued late Tuesday night, sugar exports have been allowed up to May 31 without any ERO or approval. For exports through bulk and break-bulk vessels, if shipping bill is filed and if their rotation number is allocated by May 31, such vessels will be allowed to proceed for load and export without any approval or release order.

The Indian Sugar Mills Association, a producers’ body, revised its output forecast to 35.5 million tonnes, up from its previous estimate of 31 million tonnes.

Indian mills have so far signed contracts to export 9.1 million tonnes of sugar in the current 2021/22 marketing year without government subsidies. Out of the contracted 9 million tonnes, mills have already dispatched around 8.2 million tonnes of the sweetener.

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