The government has decided to extend restrictions on sugar exports due to increasing demand during the festive season and concerns about a poor sugarcane crop resulting from an unfavorable monsoon. These measures are being taken to prevent a surge in sugar prices during an election year. Despite a more than 2% increase in sugar prices compared to the previous year, speculations about lower production and heightened demand during festive periods could exacerbate the situation.
Initially, the government categorized sugar as “Restricted” from October 28, 2021, until October 31, 2023. Now, they have decided to extend this restriction to cover all varieties of sugar, including raw, white, refined, and organic sugar, until further notice. In the previous year, sugar production reached 350 Lakh Metric Tonnes (LMT), while domestic consumption stood at approximately 280 lakh metric tonnes, and 43 lakh metric tonnes of sugar were redirected for ethanol production to blend with petrol. Furthermore, the opening stock of sugar on October 1 was 57 lakh metric tonnes, which was lower than the previous year.
The unfavorable outlook for sugar production in 2023-24 (October-September) can be attributed to a subpar monsoon. The Indian Meteorological Department recorded a nearly 6% deficit from the long-period average, marking the first deficit monsoon in the last five years. August, in particular, was the driest in the recorded history of the IMD since 1901, with a deficit of minus 36%. This exceptionally dry August has placed significant stress on India’s sugarcane crop.
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