After India banned some rice exports to control domestic prices, traders are worried another food staple could be vulnerable: sugar.
The world has become increasingly dependent on sugar exports from the South Asian nation as global supplies tighten. Uneven rainfall across India’s agricultural belts has stoked concern that sugar production will fall short, potentially dropping for a second straight year in the season starting October.
This may limit the country’s ability to export. The government has already restricted overseas sale of wheat and some rice varieties to protect domestic supplies and cool prices, adding to stresses on global food markets that have already been roiled by bad weather and the worsening conflict in Ukraine.
The rice export ban is a clear signal the government is concerned about food security and inflation, said Henrique Akamine, head of sugar and ethanol at Tropical Research Services. “The worry now is that the government will probably follow suit and do something similar regarding sugar,” he added.
Sugar cane fields in the main producing regions of Maharashtra and Karnataka didn’t get adequate rain in June, leading to crop stress, according to Aditya Jhunjhunwala, president of the Indian Sugar Mills Association. The group expects sugar output to drop 3.4% from a year ago to 31.7 million tons in 2023-24. Still, Jhunjhunwala said supplies can meet domestic demand.
