As a result of India’s prohibition on some rice exports in an effort to regulate domestic prices, traders are concerned that sugar, another key crop, may also be at risk.
As global supplies become more scarce, the globe has come to depend more and more on the South Asian country’s sugar exports. Uneven rainfall in India’s agricultural belts has raised fears that sugar production would be insufficient and may consistent decline for a second consecutive season in the season beginning in October.
This might reduce the nation’s export capacity. To safeguard domestic supplies and maintain prices, the government has already prohibited the sale of several types of rice and wheat abroad. This has added to the strain on the world's food markets, which are already under pressure from bad weather and the escalating conflict in Ukraine. India will increase its usage of sugar for biofuel in the meanwhile. According to the group, mills would divert 4.5 million tonnes to produce ethanol, up 9.8% from the previous year.
India may not allow any exports at this output level. India has previously capped its sugar exports. Shipments are limited to 6.1 million tonnes for the 2022–2023 season, down from 11 million tonnes the previous season.
Even though they have dropped from their peak of 26.83 cents a pound in April, the highest level since 2011, sugar futures have gained about 20% this year. The market is concerned that El Nio may cause production to suffer in South and Southeast Asia by making the region hotter and drier. Thailand's output could also decrease.
The Indian government is unlikely to decide on the sugar export quotas for 2023–24 just yet. Only in October will the crop begin to be harvested, and recent improvements in the rain will help the crop.