India, the World's No.1 Sugar Producer, Extends Export Restrictions for Another Year

Annual production limited to 36 million tons, exports capped at 8 million tons
Market conditions deemed unstable... Export restrictions on wheat, rice, and others also repeated

India, the world's second-largest sugar exporter, has announced that it will extend its sugar export restrictions for one more year. The photo shows a worker carrying a sack of sugar in Kolkata, India. Photo by Reuters.

[Asia Economy Reporter Kim Hyunjung] India, the world's largest sugar producer and second largest exporter, has decided to extend its sugar export restriction measures for one more year until the end of October next year.

According to local media such as The Indian Express on the 29th (local time), the Indian government decided to limit sugar exports to curb domestic price increases. Although this year's sugarcane harvest in India is abundant, there are uncertainties in both domestic and international markets, prompting the government to take such measures. India's sugar production this year is reported to reach about 36 million tons. Previously, the Indian government introduced sugar export restrictions in May, and with this decision, the export limits have been extended for another year. From October 2021, the sugar export volume for one year was about 10 million tons.

This year, international sugar prices have been unstable due to factors such as a decrease in production in Brazil, the world's largest sugar exporter, and rising oil prices. In particular, the rise in oil prices increased demand for bioethanol fuel, a petroleum substitute, in Brazil, leading many factories to produce ethanol from sugarcane instead of sugar, worsening the negative impact.

India has repeatedly imposed export restrictions on grains such as wheat and rice this year. In May, the government introduced restrictions allowing wheat exports only with permission, followed by limiting wheat flour exports in August. In September, India banned the export of broken rice (sara-gi) and additionally imposed a 20% export tariff on both brown and polished rice. Broken rice, used for animal feed or ethanol production, is inexpensive and mainly imported by countries in Africa. India is the world's second largest rice producer.

Due to India's significant influence in the international grain market, every time India announces such export restrictions, international grain prices surge, causing market volatility. Moreover, countries such as Egypt and T?rkiye (Turkey) are also imposing export restrictions on their domestically produced agricultural products. Given this situation, these countries' restriction measures have been criticized as 'protectionism.' Last month, Bloomberg pointed out, "As the food crisis accelerates due to abnormal weather and Russia's invasion of Ukraine, more countries are adopting protectionist policies," adding, "These measures could exacerbate food shortages and political instability in impoverished countries, requiring a global coordinated response."

This content was produced with the assistance of AI translation services.