India set to ban sugar exports for the first time in 7 years: Report

India is likely to ban sugar exports in the next season beginning October, putting a stop to the shipments for the first time in seven years, reported Reuters. As per the report, lack of rains has cut the sugarcane yields this year.

This ban would further increase the rates in New York and London which are already trading at a multi-year high and also add to the inflationary pressures on the global food markets.

Reuters also quoted an official who said that the government is prioritising managing the local sugar requirements and produce ethanol from surplus sugarcane.

"Our primary focus is to fulfil local sugar requirements and produce ethanol from surplus sugarcane. For the upcoming season, we will not have enough sugar to allocate for export quotas", an official told Reuters.

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India exported only 6.1 million tonnes of sugar during the current season to Sept 30 as compared to 11.1 million tonnes that were sold in the previous season.

Monsoon rains in the top cane growing districts of the western state of Maharashtra and the southern state of Karnataka have been as much as 50% below average so far this year. Both these states together account for more than half of India's total sugar output.

An industry official told Reuters that scarce rains would cut sugar output in the 2023/24 season and even reduce planting for the 2024/25 season. In nearly two years, local sugar prices jumped to their highest level this week. With this the government urged the mills to sell an extra 2,00,000 tonnes in August. As per Reuters, India's sugar production could fall 3.3% to 31.7 million tonnes in the 2023/24 season.

Retail inflation in India jumped to a 15-month high of 7.44% in July and food inflation to 11.5% - its highest in over three years.