India is anticipated to forbid mills from exporting sugar starting in the upcoming season in October, stopping shipments for the first time in seven years, as a lack of rain has cut cane yields, government sources said. India's exclusion from the global market would probably push up benchmark prices in New York and London, which are currently trading at multi-year highs, raising concerns about future food market inflation.
"Our primary focus is to fulfil local sugar requirements and produce ethanol from surplus sugarcane," said a government source. "For the upcoming season, we will not have enough sugar to allocate for export quotas."
India allowed mills to export only 6.1 million tonnes of sugar during the current season to Sept. 30, 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.
According to weather department data, monsoon rainfall in the leading cane-growing regions of Maharashtra and Karnataka, which together produce more than half of all the sugar produced in India, have been up to 50% below average so far this year.