India bans sugar exports till September amid supply concerns; exemptions for EU, US quotas

The Centre on Wednesday prohibited sugar exports with immediate effect till September 30 or until further orders, as the government moved to curb domestic prices and ensure adequate local availability amid concerns over lower production.

In a notification issued by the Directorate General of Foreign Trade (DGFT), the government amended the export policy for sugar under ITC (HS) Codes 1701 14 90 and 1701 99 90 from “restricted” to “prohibited”.

The order covers raw sugar, white sugar and refined sugar exports.

The notification said the prohibition would remain in force till September 30 unless extended further. If not extended, the export policy will revert to “restricted”.

Certain exports exempted from ban

The government clarified that the export ban would not apply to shipments made to the European Union and the United States under CXL and TRQ quotas.

Exports under the Advance Authorisation Scheme (AAS) and government-to-government shipments for food security purposes will also continue to be permitted.

The notification further stated that consignments already in the export pipeline would be allowed under specific conditions.

Shipments can proceed if loading had started before the notification date, or if the shipping bill had already been filed and the vessel had berthed or anchored at an Indian port before the order came into effect.

Exports will also be allowed where consignments had already been handed over to customs authorities or custodians before publication of the notification.

Production concerns behind move

As per Reuters, government’s decision was likely aimed at controlling domestic prices as production is expected to lag consumption for a second consecutive year due to weakening sugarcane yields in key growing regions.

Fears that El Niño conditions could disrupt the upcoming monsoon have also raised concerns over next season’s output.

India, one of the world’s largest sugar exporters after Brazil, had earlier permitted mills to export 1.59 million metric tonnes of sugar. Traders had already signed contracts for around 800,000 tonnes, of which more than 600,000 tonnes had been shipped.

“The government had provided additional export quotas in February, which encouraged traders to sign export deals. It will now be a headache for traders to fulfill those export orders,” a Mumbai-based dealer with a global trade house told Reuters.

Following the announcement, New York raw sugar futures extended gains to more than 2%, while London white sugar futures jumped 3%.
Ready to Make a Smarter Property Decision? Build Your Legacy with TOI Homes.