Bloomberg – India will restrict sugar exports as a precautionary measure to secure its own food supply, another act of protectionism after it banned the sale of wheat just over a week ago.
The government plans to limit sugar exports to 10 million tons for the marketing year ending September, a person familiar with the matter said. The goal is to ensure sufficient supplies before the next sugar campaign begins in October, said the person, who asked not to be identified because the information was private.
The move could be announced in the coming days, the person said. IIndia was the world’s largest sugar exporter last year, after Brazil, and counts Bangladesh, Indonesia, Malaysia and Dubai among its top customers.
A spokesman for the Food and Commerce Departments did not immediately respond to a request for comment.
India shocked the world earlier this month by restricting wheat exports after a heatwave destroyed some crops and benchmark prices soared. Government moves to ban foreign sales, particularly in Asia, have intensified in recent weeks since Russia’s invasion of Ukraine led to a further rise in already high world food prices.
Other recent moves by Asian governments include Indonesia’s ban on palm oil exports and Malaysia’s ban on overseas chicken sales.
The recent sugar move looks like an extreme case of caution as domestic supply is plentiful. According to the Indian Sugar Manufacturers Association, India is expected to produce 35 million tons and consume 27 million tons this season. Including last season’s reserves of about 8.2 million tons, it has a surplus of 16 million, with up to 10 million for export.
An export ban could have a significant impact on the world market for sugar as India is a major producer and exporter. Once shipments reach 9 million tons, exporters will need to apply for permits to ship the remaining million tons, the person said.
The companies have signed agreements to ship 8.5 million tons since October 1 last year. An estimated 7.1 million tonnes were shipped by the end of April, with another 800,000 to 1 million tonnes expected to be exported in May, the industry group reported last week.