The Central government is likely considering imposing stock limits on the Sugar trade if all entities don’t disclose their inventories by October 17, according to a report published by Business Standard.
India may shift sugar exports to the ‘prohibited’ category from ‘restricted’ for the entire 2023-24 (October-September) season, concerned about the impact of the weakest monsoon in five years on sugarcane crops in the major producing states of Maharashtra and Karnataka, two government officials said.
Sugar Mills can currently apply for an export quota under the restricted category, but moving to the prohibited category would mean a complete export ban.
“Sugar output is expected to fall to 30 million tonnes (mt) in the 2023-24 sugar season against domestic consumption of 27.5-28 mt due to El Nino compromising monsoon rain in August,” one of the officials said.
“However, El Niño is anticipated to strengthen through 2023-24, which could lead to intensification of dry conditions during the next sugar season. This may lead to a further decline in sugar production during the 2024-25 season,” the official added.
The El Nino weather pattern made August the driest in more than a century. The rainfall during the month was 161.7 mm, the lowest since 1901.
India, which surpassed Brazil in the 2021-22 season to become the world’s largest sugar producer and second-largest exporter, imposed export controls in October last year, adopting a mill-wise quota system. By the end of the 2022-23 crop year, local sugar mills exported 6.2 mt of sugar.
On 2 June, Mint reported that the food and public distribution department may not give sugar mills a free hand in exporting sugar to ensure domestic supply and keep prices in check.
Subsequently, on 29 August, Mint reported that the government will review its sugar export policy, which is currently under the restricted category, in October after state cane commissioners come up with their crop estimate for the 2023-24 season.
In the 2022-23 season, India is estimated to have produced 32.7-32.8 mt of sugar after the diversion of 4.3 mt of the commodity for ethanol production, closing the season with 5.5-6 mt in stocks.
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Updated: 17 Oct 2023, 09:43 AM IST
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