India extends sugar export curbs beyond October
India introduced a quota system in 2022-23 and limited sugar exports to about 6 million tonnes after late rains cut production
New Delhi: The government on Wednesday extended curbs on sugar exports beyond the end of October as it tries to keep local prices in check, meet ethanol production requirements and ensure adequate closing stock at the end of the sugar season.
In October 2022, the Directorate General of Foreign Trade (DGFT) placed exports of raw, white and refined sugar in the restricted category, requiring exporters to secure permission from the food ministry to sell overseas. The restriction was to stay in place until further orders or 31 October 2023, whichever was earlier. Wednesday’s notification adds organic sugar to the category and extends the curbs “till further orders” without specifying an end date.
However, the restriction does not apply to sugar exported to the European Union and the US under the CXL and TRQ quota systems, the DGFT notification clarified.
India’s sugar season runs from October to September. The weakest monsoon in five years has cast a cloud over this year’s sugarcane harvest in major producers such as Maharashtra and Karnataka. On 2 June, Mint first reported that the government was unlikely to allow mills to export sugar in the 2023-24 (October-September) season. On 13 October, Mint reported on a proposal to place sugar exports in the ‘prohibited’ category even as the food department favoured an extension of sugar exports under the ‘restricted’ category.
“There is no impact on the sugar industry as such as it was anticipated amid weak monsoon taking a toll on production in key producing states. The government had to come up with a fresh notification as the existing one is expiring on 31 October,” said Atul Chaturvedi, executive chairman of Shree Renuka Sugars.
On Wednesday, the all-India average retail sugar price was ₹43.99 a kg, up 0.6% month-on-month and 3% from a year earlier, according to data from the consumer affairs ministry.
“Sugar output is expected to fall to 30 million tonnes (mt) in the 2023-24 sugar season against domestic consumption of 27.5-28 mt due to the El Niño phenomenon compromising monsoon rain in August,” a government official said earlier. “However, El Niño is anticipated to strengthen through 2023-24, which could lead to intensification of dry conditions during the next sugar season. This may lead to a further decline in sugar production during the 2024-25 season.”
India has set a target to produce 4.5 mt ethanol from sugar this season, as against 4.3 mt last season, so more diversion to ethanol production may diminish stocks at the end of the sugar season. “A slightly higher closing stock will help contain domestic retail prices of sugar and will be used as a buffer for the 2024-25 season,” the official added.
Sugar exports were first restricted from 1 June last year as mills exhausted their export quota by May. Beyond that, the government did not allocate additional export quotas to sugar mills to ensure the country had ample domestic stocks amid fear of a shortage during the festival period.
India, which surpassed Brazil in the 2021-22 season to become the world’s largest sugar producer and second-largest exporter, imposed export controls last year, adopting a mill-wise quota system. By the end of the 2022-23 crop year (July-June), local sugar mills had exported 6.2 mt of the sweetener.
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First Published:18 Oct 2023, 11:40 PM IST
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