July 3, 2022
BOL News | https://bit.ly/3yJaED4
Just days after banning wheat exports, India decided to limit the selling of sugar on overseas markets.
The Indian government announced on Wednesday that it would restrict sugar exports to 10 million tonnes during the marketing season, which runs through September, in order to control prices. Additionally, sellers are urged to request “special approval” from the relevant authorities before to exporting any sugar between June 1 and October 31.
The greatest producer of sugar in the world, India is also the second-largest exporter after Brazil. After experiencing “record rise in exports” both last year and this season, the Narendra Modi administration claimed it was necessary to take action in order to maintain sugar stockpiles in the nation.
The decision to restrict exports was made at a time when annual retail inflation in the third-largest economy in Asia reached 7.8 percent in April, the highest level in almost eight years. As major producers reduce agricultural exports, it is also another indicator of increased food protectionism around the world. This adds to the supply shock brought on by Russia’s invasion of Ukraine in February. Together, Russia and Ukraine export wheat at a rate of roughly 30%.
Indian sugar mills have so far agreed to contracts for shipments of around 9 million tonnes for the current marketing year, which runs from October 2021 to September 2022. According to government statistics, the nation exported 7 million tonnes of the sweetener during the previous calendar year, which was the most in recent memory.
On Wednesday in London, white sugar futures were trading 1% higher at $556.50 a metric tonne. They are around 26 percent higher than they were at this time last year and have increased by 13 percent since the beginning of January.
According to the World Bank, the invasion of Ukraine by Russia has caused a historic shock to the commodity markets that will keep prices high through the end of 2024. According to the report, a 40 percent increase in the price of wheat will cause food costs to climb by 22.9 percent this year.
The government’s priority, according to Malaysia, is its own citizens, thus earlier this week it attempted to impose restrictions on the export of chicken to its neighbours. And only a few days prior, India had halted wheat exports due to life-threatening heat waves that were hampering production and driving local prices to all-time highs. Despite being the world’s second-largest producer of wheat behind China, the nation does not export much of the grain.
India’s minister of commerce, Piyush Goyal, stated on Tuesday at the World Economic Forum in Davos that “our export restrictions should not disrupt global markets.”
We still permit exports to our neighbours and vulnerable nations, he continued.
India’s limits, in spite of these guarantees, highlight how precarious the world food situation is. Global purchasers hoped that Indian wheat exports would help close the gap left by the European war, which has impeded essential export shipments of agricultural products.
Last week, there was some positive news, though. Indonesia said that it would end an April-enacted restriction on the export of palm oil. The substance is widely used as cooking oil and in various foods, and the nation in Southeast Asia is the world’s largest producer.