MUMBAI/NEW DELHI, Aug 23 (Reuters) – India is anticipated to ban mills from exporting sugar within the subsequent season starting October, halting shipments for the primary time in seven years, as an absence of rain has minimize cane yields, three authorities sources mentioned.

India’s absence from the world market can be prone to improve benchmark costs in New York and London which can be already buying and selling round multi-year highs, triggering fears of additional inflation on world meals markets.

“Our primary focus is to fulfil local sugar requirements and produce ethanol from surplus sugarcane,” mentioned a authorities supply who requested to not be named according to official guidelines. “For the upcoming season, we will not have enough sugar to allocate for export quotas.”

India allowed mills to export solely 6.1 million tonnes of sugar throughout the present season to Sept. 30, after letting them promote a report 11.1 million tonnes final season.

In 2016, India imposed a 20% tax on sugar exports to curb abroad gross sales.

Monsoon rains within the high cane rising districts of the western state of Maharashtra and the southern state of Karnataka – which collectively account for greater than half of India’s whole sugar output – have been as a lot as 50% under common to this point this yr, climate division knowledge confirmed.

Patchy rains would minimize sugar output within the 2023/24 season and even cut back planting for the 2024/25 season, an trade official, who declined to be named, mentioned.

Local sugar costs jumped this week to their highest degree in practically two years, prompting the federal government to permit mills to sell an extra 200,000 tonnes in August.

“Food inflation is a concern. The recent increase in sugar prices eliminates any possibility of exports,” mentioned one other authorities supply.

Retail inflation in India jumped to a 15-month excessive of seven.44% in July and meals inflation to 11.5% – its highest in over three years.

India’s sugar manufacturing may fall 3.3% to 31.7 million tonnes within the 2023/24 season.

“We’ve allowed mills to export large volumes of sugar during the past two years,” mentioned the third authorities supply. “But we also have to ensure sufficient supplies and stable prices.”

India stunned patrons final month by imposing a ban on non-basmati white rice exports. New Delhi additionally imposed a 40% obligation final week on exports of onions because it tries to calm meals costs forward of state elections later this yr.

A Mumbai-based vendor with a worldwide commerce home mentioned decrease output in Thailand was additionally anticipated to cut back shipments and main producer Brazil would alone not have the ability to fill the hole.

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