- India limits its sugar exports to 10 million tons by September this year.
- The Indian government said the measures were to ensure domestic sugar availability and ensure price stability.
- Food prices in India rose 8.38% year-over-year in April, well above the 0.85% gain in October.
India, a major sugar producer, will soon limit sugar exports. It is a recent protectionist measure that has expanded the country’s inventory to secure domestic food supplies.
The Indian government said: announced on tuesday It said it would limit sugar exports to 10 million tonnes for this marketing year, which runs through September, to ensure domestic availability of goods and ensure “price stability”. Restrictions start on June 1st.
India is the world’s second largest sugar producer and exporter after Brazil. The main importers of Indian sugar are Indonesia and Sri Lanka. The South Asian country is said to have exported 7.2 million tonnes of sugar in the last marketing year. US Department of Agriculture — The new export limit is far from sufficient.
India does not face sugar According to the U.S. Department of Agriculture, there is a shortage. But, as in many countries, food inflation in India has risen sharply over the past year, putting pressure on the government to mitigate its impact on voters.
“Uncontrolled exports can cause scarcity and local prices can soar during holidays,” a senior government official said. Reuters on wednesday. India is the world’s largest consumer of sugar and this October celebrates its biggest festival, Diwali.
International sugar prices have already surged 20% in the past 12 months due to a variety of factors, including a supply shock and a recovery in demand from the pandemic. The price hike was also driven by a surge in global energy prices, which started producing biofuels from sugar-based ethanol at factories in Brazil.
India’s sugar export restrictions came after it banned wheat exports on May 13.
The Russian invasion of Ukraine has raised food and fertilizer prices the most since 2008. world bank reported in the April report. Both countries are major players in the global commodity market, accounting for a large share of the global wheat, sunflower oil and energy.
This pushed US inflation to its highest level in 40 years, and the Consumer Price Index rose 8.3% in April from a year earlier. Bureau of Labor Statistics.
To curb food inflation, some countries around the world have restricted exports. they include Indonesia, Banned the export of palm oil, the world’s most consumed vegetable oil, for three weeks; Argentinian Ban on export of certain beef cuts.
A CMC Markets (Singapore) analyst says the rise of food protectionism will increase the likelihood of a “settling global inflationary environment”. Kelvin Wong on twitter.
Intercontinental Exchange’s benchmark sugar futures price rose 1% after the announcement of India, but remained unchanged at 2am EST.