The Indian government will not require to ban exports of sugar despite a dip in the domestic production of the commodity. This is because the export quota of 61 lakh tonnes (lt) has almost been exhausted and there is no scope for more exports, sources said. “Sugar exports for the season were capped at 61 lt. The quota has been exhausted more or less and there is no possibility of more exports. So, there is no need for an export ban,” an official tracking the matter explained to businessline.

Production estimate cut

Last month, the Indian Sugar Mills Association (ISMA), an industry body of private sugar companies, cut its estimate of sugar production for the current season (October 2022-September 2023), to 32.8 million tonnes (mt) from previous 34 mt after taking into consideration a drop in Maharashtra and Karnataka output and a marginal increase in Uttar Pradesh.

Since domestic consumption is estimated to be around 27.5 mt, no shortage is expected in the local markets. However, as sugar is a sensitive commodity, the government is keeping an eye on prices and supply, sources said.

Industry sources said as much as 60.5 lt have already been despatched by sugar mills against the allotted quota. About 57-58 lt have already been shipped out of the country since it was allowed, they said. “There is no expectation for any further allocation after production estimate was trimmed,” an industry official pointed out.

Sugar production in the country already dipped 5.4 per cent to 31.1 mt as of April 15 in the 2022-23 sugar season (October-September) against 32.87 mt in the year-ago period, according to ISMA.

Meanwhile, the Food Ministry is fine-tuning production estimates to make it more accurate in the future, after the assessment in Maharashtra went completely off-the-mark. “Near-accurate estimate helps the government to formulate policy accordingly. As 6 mt of export was allowed at the beginning, fortunately, the drop in production is not that big, otherwise there could have been a problem of domestic availability,” said a source at the ministry.