The Centre on Wednesday banned sugar exports with immediate effect until September 30, or until further orders, as the government moved to ensure adequate domestic supplies and contain rising prices 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 decision applies to exports of raw sugar, white sugar and refined sugar. The notification stated that the prohibition would remain in effect until September 30 unless extended further. If no extension is announced, the export policy will automatically revert to the “restricted” category.
Certain Export Categories Exempted
The government clarified that the export restrictions would not apply to shipments destined for the European Union and the United States under CXL and TRQ quota arrangements.
Exports carried out under the Advance Authorisation Scheme (AAS), as well as government-to-government shipments linked to food security commitments, will also continue without interruption.
In addition, the notification provided relief for consignments already in the export pipeline. Shipments will still be permitted if loading had commenced before the notification date, or if shipping bills had already been filed and vessels had berthed or anchored at Indian ports before the order came into force.
Exports will also be allowed in cases where consignments had already been handed over to customs authorities or custodians before publication of the notification.
Production Shortfall Triggers Government Action
According to Reuters, the government’s move is aimed at controlling domestic sugar prices as production is expected to remain below consumption levels for the second consecutive year. Weakening sugarcane yields in major producing regions have raised concerns over supply availability.
Fears surrounding possible El Niño conditions affecting the upcoming monsoon season have further intensified worries about next season’s output.
India, among the world’s largest sugar exporters after Brazil, had earlier allowed sugar mills to export 1.59 million metric tonnes of sugar. Traders had already signed contracts for nearly 800,000 tonnes, of which more than 600,000 tonnes had reportedly been shipped.
A Mumbai-based dealer associated with a global trade house told Reuters that traders who entered export agreements after the government granted additional export quotas in February could now face difficulties fulfilling those commitments.
Following the announcement, New York raw sugar futures extended gains beyond 2%, while London white sugar futures rose by 3%, reflecting global concerns over tightening supplies.
