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There are fears of an adverse impact on production in major manufacturing states like Maharashtra and Karnataka
Agency > Mumbai
The Indian government is likely to ban the export of sugar from India during the next season starting from October 1. A notification in this regard is expected in the first week of November, said Sakari Equipment. Sugar season is from October to September.
After selling sugar at a record 1.1 million tonnes in 2021-22, India limited export volumes during 2022-23 to ensure supply in domestic markets and keep prices under control. At the beginning of the sugar year 2022-23, the government had limited sugar exports to around 6 lakh tonnes. This quota is also depleting with rising prices. Our main priority is to keep domestic prices low, it added.
The top sugarcane growing states of Maharashtra and Karnataka averaged about 50 percent below normal till August. With the all-India deficit falling from 10 per cent on August 31 to 5 per cent on September 25, despite improved rainfall conditions, fears of a fall in sugar production cannot be ruled out. India has been the world’s second largest sugar producer and a major exporter in recent years. As the country’s sugarcane crop is increasingly being used to make ethanol, the demand for sugarcane has increased. In the current sugar season 2022-23, about 45 lakh tonnes of surplus sugar has been diverted to ethanol. By 2025, the government aims to divert more than 6 million tonnes of surplus sugar to ethanol production.
India is grappling with a possible decline in production of key commodities due to uneven rainfall and a rise in food prices. Headline retail inflation hit a 15-month high of 7.44 percent in July, expected to remain higher than the Reserve Bank’s estimate for the next few months. According to data from the Ministry of Consumer Affairs, sugar prices rose by about 2.5 percent on September 28 compared to a month ago. Consumer Price Inflation (CPI) for commodities was recorded at 3.8 percent in August.
The FAO Sugar Price Index was 1.9 points (1.3 percent) higher in August and 37.7 points (34.1 percent) higher than its level in the same month last year. International commodity prices also remain high, averaging 148.2 points in August. According to FAO, the rise in global sugar prices was mainly due to heightened concerns about the impact of the El Niño weather phenomenon on global production prospects. In India, below average rainfall in August was detrimental to the sugarcane crop.