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The Union government capped sugar exports at 100 lakh metric tonnes (LMT) from 1 June, anticipating a surge in demand during the upcoming festive season that could have driven prices higher. Food secretary Sudhanshu Pandey said on Wednesday that India was seeing record sugar production and that the restriction was precautionary.

Food inflation in April hit a record 8.38%, forcing the government to ban wheat exports earlier during the month. Government officials said that in case of sugar, a restriction was imposed instead of a ban, in order to avoid problems at ports similar to what happened during the abrupt wheat export ban.

“We want to ensure two to three months of sugar stock ahead of the start of the new sugar crushing season. The average monthly domestic consumption is about 23 LMT, so we aim at having 60-62 LMT of sugar stock at the start of the new crushing season in October," Pandey said.

He said the government is looking to keep prices stable, adding that wholesale prices of sugar in India are range-bound between 3,150 and 3,500 per quintal, while retail prices are also within control in the range of 36-44 in various parts of the country.

On questions regarding protectionism, the food secretary said that it would be “simplistic" to call these steps protectionist and that every country prioritizes domestic needs over exports. “The idea is to have stable prices and not see an undue spike in the future," he said at a press conference.

The export cap on sugar assumes significance as global demand for the commodity has been on the rise, especially due to a dip in sugar production in Brazil, one of the largest sugar producers in the world. Amid high global demand, India’s sugar exports exceeded 10 million tonnes for the first time in FY22, up 65% compared to FY21, official data showed.

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