The move could drive up global prices and trigger inflation in the food markets, the outlet has said
India is considering a ban on exports of sugar for the first time in seven years following diminished cane yields affected by heat and a lack of rain, Reuters reported on Wednesday, citing government sources.
The country is the world’s second-largest sugar exporter behind Brazil, according to the International Sugar Organization, and the largest consumer and producer of the product. This season, however, the country has only exported 6.1 million tons compared to the record 11.1 million tons in the 2021-22 season.
“We’ve allowed mills to export large volumes of sugar during the past two years,” a government source told Reuters, adding: “But we also have to ensure sufficient supplies and stable prices” domestically.
India’s sugar production could drop by 3.3% to 31.7 million tons in the 2023-24 season, as the country’s cane-growing districts have seen half the average amount of rain this year, the outlet said.
“Food inflation is a concern. The recent increase in sugar prices eliminates any possibility of exports,” another government source said.
Retail inflation in India surged to a 15-month high of 7.44% in July, while food inflation soared to 11.5%, the highest figure in over three years, according to official data.
Meanwhile, the potential suspension of sugar exports, which is aimed at solving domestic supply problems, could have a global impact.
The ban could drive up benchmark prices on the exchanges in New York and London, which are already trading the commodity at a near multi-year high. This could potentially increase inflation in the global food markets, the outlet noted.
This comes after the Indian government suspended exports of non-basmati white rice in late July after prices jumped 3% in a month following heavy monsoon rains, which caused widespread damage to crops.
For more stories on economy & finance visit RT’s business section
August 25, 2023 at 06:18PM