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India is set to halt sugar exports for the first time in 7 years


New Delhi: In an upcoming move set to commence in October, India is poised to enact a ban on sugar exports, marking a cessation of shipments for the first time in a span of seven years, as per a Reuters report. This embargo is attributed to diminished sugarcane yields due to insufficient rainfall experienced this year.


This prohibition is expected to contribute to the already elevated rates in New York and London, where sugar prices are currently trading at multi-year highs. The consequence of this development could intensify inflationary pressures within the global food markets.


A government official, cited by Reuters, emphasized the primary focus on addressing local sugar requirements and utilizing surplus sugarcane for ethanol production. The official stated, "Our primary focus is to fulfil local sugar requirements and produce ethanol from surplus sugarcane. For the upcoming season, we will not have enough sugar to allocate for export quotas."


The impact of the inadequate monsoon rains in major sugarcane-growing districts, particularly in Maharashtra and Karnataka, is noteworthy. These regions collectively contribute to over half of India's total sugar output. With limited rainfall anticipated to impact both the 2023/24 sugar output and the subsequent planting for 2024/25, the nation's sugar industry faces challenges.


As a response to escalating local sugar prices, the government has urged mills to augment sales by an additional 2,00,000 tonnes in August. This comes amid projections by Reuters indicating a potential 3.3% decline in India's sugar production, totaling 31.7 million tonnes, for the 2023/24 season.


In the broader economic context, India is grappling with a retail inflation surge to a 15-month peak of 7.44% in July, with food inflation soaring to 11.5%, the highest in over three years.

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