India reduces quota for exports of sugar amid strained global supplies

By Al Mayadeen English
Source: Bloomberg
6 Nov 2022 14:02

In New York alone, prices of raw sugar have jumped more than 6% since late October.

India’s move to slash sugar export quota to tighten world supply

India's Ministry of Consumer Affairs said on Sunday that the government decided to reduce the quota for sugar exports for 2022-23 in a move to "prevent uncontrolled export of sugar" and to "ensure sufficient availability of sugar for domestic consumption at a reasonable price," a statement issued by the government read.

Government led by PM @NarendraModi ji has issued guidelines along with mill-wise export quota for sugar season 2022-23.

This will boost India’s sugar ecosystem benefitting both sugarcane farmers & Industry. pic.twitter.com/MQiURVcI0Z
— Piyush Goyal (@PiyushGoyal) November 6, 2022

According to the statement, the government asked sugar mills to sell 60 Lakh Metric Tonnes, which equates to 6 million tonnes, in the global market by May 31, adding that the quota for 2021-22 totaled 11.2 million tons.

This move raises prompt concerns for the global market as the world is already struggling with the supplies of basic commodities.

Brazil, which ranks among the top producers of sugar, has been facing serious climatic issues, which are causing the sugar cane crushing to be delayed.

In New York alone, prices of raw sugar have jumped more than 6% since late October.

It is possible that prices may increase further since India issued this announcement.

Earlier this week, it was reported that the government of India was considering authorizing the exports of sugar in different tranches: a first tranche of 6 million tons, and a second of about 3 million. The numbers will be relative to the pace of production.

Last year, the country implemented a series of strict regulatory measures to ensure sufficient local supply after output concerns.

The quota is expected to last until October next year.

But interestingly, the restrictions don’t apply to sales to the EU and the US under some quotas.

The Indian Sugar Mills Association forecasts the sugar output at 35.5 million tons this year.

Among its top clients are Indonesia, Bangladesh, Malaysia, and the UAE. India also ranks among the world’s biggest consumers of sugar.

Managing director of Meir Commodities India Pvt., Rahil Shaikh, said Indian sugar mills have already shrunk to export as much as 2.2 million tons, which traded about 500,000 tons of sugar in the domestic and overseas markets in the 2021-2022 season.