25 August 2023 12:00 am Views - 301
India is expected to halt its sugar exports in the next season, beginning in October, a decision with potential ramifications for both local and international economies. According to sources, this decision comes after a lack of rain has severely impacted cane yields in key sugar-producing states.
The absence of India from the global market is anticipated to raise benchmark prices in New York and London, which are already near multi-year highs, raising concerns about additional inflation on global food markets.
Reuters cited a government official saying, “Our primary focus is to fulfill local sugar requirements and produce ethanol from surplus sugarcane. For the upcoming season, we will not have enough sugar to allocate for export quotas.”
India permitted mills to export just 6.1 million metric tons of sugar during the current season, which ended on September 30, after allowing them to sell a record 11.1 million metric tons the previous season.
Furthermore, monsoon rains in the key cane-growing regions of Maharashtra and Karnataka, which account for more than half of India’s total sugar output, have been as much as 50 percent below average this year, according to meteorological department statistics.
In July, retail inflation in India reached a 15-month high of 7.44 percent, while food inflation reached 11.5 percent, the highest level in more than three years.
Additionally, last month, India startled importers by imposing a restriction on non-basmati white rice exports.
Last week, New Delhi put a 40 percent levy on onion exports in an effort to cool food prices ahead of state elections later this year.
Local sugar prices reached their highest level in nearly two years this week, prompting the government to enable mills to sell an additional 200,000 metric tons in August.
“Food inflation is a cause for concern. “Any possibility of exports has been eliminated by the recent increase in sugar prices,” claimed another official source cited by Reuters.
Meanwhile, experts also highlight that India’s action will impact global markets, which are already facing challenges from reduced sugar output in other countries like Thailand. (Courtesy: https://www.wionews.com/)