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India restricts sugar exports

Bloomberg quoted sources close to India as saying that India plans to limit sugar exports to protect domestic supply.

The Indian government wants to limit sugar exports to 10 million tonnes for the current export year (running until September). The aim is to secure enough reserves before the next sugar crop starts in October. Official information may be announced in the coming days.

India is currently the second largest sugar exporter in the world after Brazil. Its main customers include Bangladesh, Indonesia, Malaysia and Dubai. The price of sugar futures traded in London today increased by 1%.





Harvesting sugar cane in Jalana, Maharashtra, India.  Photo: Bloomberg

Harvesting sugar cane in Jalana, Maharashtra, India. Photo: Bloomberg

Earlier this month, India surprised the world by restricting wheat exports due to drought affecting crop yields. This move caused the price of this agricultural product to skyrocket. In recent weeks, the export ban of some products by many countries, especially in Asia, has caused global food prices to continue to climb even though they are already very high. For example, the ban on exports of palm oil from Indonesia and chicken meat from Malaysia.

According to Bloomberg, restricting sugar exports seems to be a prudent decision, given India’s domestic supply remains ample. According to the Indian Sugar Mills Association, the country is expected to produce 35 million tonnes in the current crop and consume 27 million tonnes. If we include last season’s stockpile of about 8.2 million tons, they have a surplus of 16 million tons, including 10 million tons for export.





Sugar export output (million tons) of the world's 4 largest suppliers in 2021. Graphics: Bloomberg

Sugar export output (million tons) of the world’s four largest suppliers in 2021. Graphics: Bloomberg

The imposition of quotas is likely to have a significant impact on the global sugar market, given that India is a major producer and exporter. When the volume of shipments reaches 9 million tons, exporters will have to apply for a license to sell the remaining 1 million tons abroad.

The companies have signed contracts to transport 8.5 million tons of sugar since October 1 of last year. It is estimated that about 7.1 million tons have been shipped by the end of April and another 0.8-1 million tons are likely to be exported in May.

Session An (according to Bloomberg)

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