India on Wednesday banned sugar exports with immediate effect until September 30, 2026 or until further notice, the government said in an announcement, as the world’s second-largest sugar producer seeks to rein in local prices.
The move is likely to support global white and raw sugar prices while allowing rival producers Brazil and Thailand to increase supplies to Asian and African buyers.
India, the world’s largest sugar exporter after Brazil, allowed factories to export 1.59 million metric tons, betting production would exceed domestic demand. But production is now expected to lag behind consumption for the second consecutive year as cane yields weaken in major growing regions.
Predictions that El Nino weather conditions could disrupt this year’s monsoon have also raised the risk that next season’s output will fall below initial estimates.
Of the 1.59 million metric tons approved for export, traders have signed contracts for about 800,000 tons, of which more than 600,000 tons have already been shipped, dealers said.
The government said it would ban the export of raw and white sugar while allowing shipments already in export to continue under specified conditions.
He said shipments would be allowed if loading had already started before the publication of the notice in the Official Gazette.
Export will also be allowed where a bill of lading has been filed and the vessel has already berthed, arrived or berthed at an Indian port.
Consignments will continue to be cleared if the sugar has been handed over to customs or a warehousing authority before the notice is published, the government said.
“The government provided additional export quotas in February, which encouraged traders to sign export deals. Now it will be painful for traders to fulfill these export orders,” said a Mumbai-based dealer with a global trading house.
Raw sugar futures in New York extended gains to more than 2%, while white sugar futures in London jumped 3% after India announced an export ban.
