NEW DELHI/MUMBAI (REUTERS, BLOOMBERG) - India plans to restrict sugar exports for the first time in six years to prevent a surge in domestic prices, potentially capping this season's exports at 10 million tonnes, a government source told Reuters on Tuesday (May 24).
The aim is to ensure there are adequate stockpiles before the next sugar season starts in October, according to a person familiar with the matter. The move may be announced in the coming days, the person said.
The export limit would be another protectionist move after India banned wheat sales just over a week ago.
India is the world's biggest sugar producer and the second biggest exporter behind Brazil, and it counts Bangladesh, Indonesia, Malaysia and Dubai among its top customers.
A spokesman for both the food and commerce ministries did not immediately respond to a request for comment.
India took the world by surprise earlier this month when it curbed exports of wheat after a heatwave destroyed some crops, causing a jump in benchmark prices.
Steps by governments to ban sales abroad, particularly in Asia, have ramped up in recent weeks since Russia's invasion of Ukraine sparked a further surge in already-soaring global food prices.
The latest step on sugar appears to be an extreme case of precaution given domestic supplies are abundant. India is expected to produce 35 million tonnes this season and consume 27 million tonnes, according to the Indian Sugar Mills Association.
Including last season's stockpiles of about 8.2 million tonnes, it has a surplus of 16 million tonnes, including as much as 10 million for exports. An export halt is likely to have a significant impact on the global sugar market given India is a major producer and exporter.
Once shipments hit 9 million tonnes, exporters will have to apply for permits to send the remaining 1 million tonnes, the person said.
Companies have signed deals to ship 8.5 million tonnes since Oct 1 last year. An estimated 7.1 million tonnes have been shipped as at end-April, and another 800,000 to 1 million tonnes are likely to be exported in May, the industry group said last week.