How India’s Sugar Exports Ban Will Affect Import-Reliant Countries?

07 September 2023

Key Highlights

           ·         India world’s second-largest exporter of sugar, with USD 5,742 m value in 2022.

           ·         As major importers of Indian sugar, Arab countries braced for food price inflation.

           ·         Ban follows similar controls on rice & onions, both staples of Arab dinner table.

India is expected to ban mills from exporting sugar in the next season beginning October 2023, for at least a year. The move will halt shipments for the first time in seven years, as a lack of rain has cut cane yields. As a result, many global countries, particularly Arab nations that are import-reliant on Indian sugar would face severe shortages of sugar. It would also be likely to increase benchmark prices in New York and London that are already trading around multi-year highs, triggering fears of further inflation on global food markets.

India allowed mills to export only 6.1 million tonnes of sugar during the current season to 30^th Sep 2023, after letting them sell a record 11.1 million tonnes last season. In 2016, India imposed a 20% tax on sugar exports to curb overseas sales. The South-West monsoon rains in the top cane-growing districts of the western state of Maharashtra and the Southern state of Karnataka which together account for over half of India’s total sugar output have been as much as 50% below average so far this year.

According to a report, patchy rains would cut sugar output in the 2023-24 season and even reduce planting for the 2024-25 season. India’s sugar production could fall 3.3% to 31.7 million tonnes in the 2023-24 season. India surprised global buyers by imposing a ban on non-basmati rice exports and a 40% duty on exports of onions as it tries to calm food prices ahead of state elections later this year.

Countries Exported Highest Dollar Value Worth of Sugar in 2022

India is the world’s second-largest exporter of sugar, Brazil to the chart. In 2022, India shipped sugar worth USD 5,742 million while Brazil supplied USD 11,003 million worth of sugar. Global sugar exports valued at USD 30,891 million in 2022. Here is the list of the world’s top 10 sugar exporting countries.

India’s Sugar Exports to the World and Arab Countries by Year

India exported sugar worth USD 5,742 million to the world in 2022, an increase as compared to the previous years while Arab countries imported Indian sugar worth USD 727 million in 2022, also a rise from the previous years. Take a look at India’s sugar exports by year in the given chart.

India’s Sugar Exports to Arab Countries 2022

Arab countries are braced for a sharp rise in the price of sweet commodities after it emerged this week that India, a major supplier of sugar to the import-reliant Middle East, plans to ban sugar exports from October 2023 until September next year. See data visualization of India’s sugar exports to Arab countries in 2022.

India’s Top Export Destinations of Sugar 2022

India’s top export destinations of sugar in 2022 were Sudan, Indonesia, Bangladesh, Somalia, Saudi Arabia, the United Arab Emirates, Djibouti, Iraq, Malaysia, and Pakistan. Understand how much these countries imported Indian sugar in 2022 from the given chart.

The fall in production is a major concern for the sugar industry as Uttar Pradesh, Maharashtra, and Karnataka alone account for more than half of India’s total sugar output. Arab countries will not see further price fluctuations unless they start implementing the right food system and gradually increase self-sufficiency.