India to cap sugar exports until first half of 2024

A senior government official who did not want to be identified in line with official rules told Reuters that “the weather is a big negative factor. Last year, despite good monsoon rains, sugar production fell. This year, with El Nino, we can’t take the risk of allowing exports early.”

Meanwhile, another government official explained that in any sugar season, it takes at least a few months to get a clear idea about production, and that’s why the mills will wait until there’s an absolutely clear picture about production. As far as exports are concerned, the official added, “We will not be in any hurry at all.”

Generally, the country decides the amount of sweetener mills could export on October 1st, before the onset of the new marketing year.

As per the report, the latest delay in shipments from India due to El Nino could support global sugar prices trading near multi-year highs.

The sugar industry witnessed an output of 36 million tonnes at the start of the current sugar season to Sept. 30, 2023. However, this has squeezed down to 32.8 million tonnes.

Further, the reports added that owing to lower output, India allowed exports of 6.1 million tonnes for this season.

In the season from 2021/2022, more than 11 million tonnes were exported from the country which is an all-time high.

According to the National Ocean Service website, El Nino weather occurs when the warmer waters cause the Pacific jet stream to move south of its neutral position. This weather has a strong effect on marine life off the Pacific coast.

The southwest monsoon 2023 may face stronger-than-expected El Niño conditions that could result in weak rainfall, reduced crop output, and implications for the overall Indian economy.

In its monthly outlook, the US National Oceanic Atmospheric Administration (NOAA) said El Niño conditions associated with the warming of sea surface temperatures in the Pacific Ocean are expected to gradually strengthen into the winter, triggering concerns over extreme weather events worldwide and a weak monsoon in India.