The government is learnt to have decided against allowing a second tranche of sugar exports in the current season (October-September), following the shipment of 6 million tonne (MT) of the sweetener.
Sources said the decision was taken to ensure that domestic sweetener prices do not spike in coming months. Lower yields in Maharashtra and Karnataka have hit sugar production.
“We want to ensure that supplies are not disrupted by lower output in coming months; we have taken the decision against allowing an additional quota of sugar exports,” an official told FE.
The industry had earlier projected that the country could export around 8 MT of sugar in the 2022-23 season, after meeting requirements for ethanol production.
Retail inflation for sugar was 1.57% in April 2023. Sugar inflation was in the negative zones in November and December 2022.
Sugar prices, which have been stable since the last many years, are expected to increase in the summer months as demand for cold drinks, ice-cream and dairy products increase significantly.
“We are closely monitoring prices and we want to avoid any spike in prices because of lower output,” an official said. Last season, India had exported a record 11.2 MT of sugar.
Indonesia, Bangladesh, the UAE, Djibouti, Malaysia, Sudan and Somalia have a major share in the total sugar exports.
In the 2020-21 season, sugar exports rose to 7.1 MT. In sugar seasons 2017-18, 2018-19 and 2019-20, only about 0.6 MT, 3.8 MT and 5.9 MT of sugar was exported.
The government followed the maximum admissible export quota (MAEQ) in 2020-21 and the open general licence system in 2021-22.
Meanwhile, according to the National Federation of Co-operative Sugar Factories, the sugar production in the 2022-23 season could decline by 9% to 32.5 MT from the previous year’s output of 35.9 MT, due to lower yield in Maharashtra and parts of Karnataka.
The crop has been affected by adverse weather conditions like excessive rainfall and lack of sunlight during the August-October season of last year.
The Indian Sugar Mills Association has projected the sugar output for the 2022-23 season at 31.1 MT, which excludes around 4.5 MT to be diverted towards making ethanol. The output is against 32.87.8 MT estimated in the previous season.
Domestic demand for sugar is around 27 MT annually.
According to the price-monitoring cell of the department of consumer affairs, the modal retail prices of sugar on Friday was `40/kg, which has been unchanged in the last six months.