Explained: Why India has Curbed Sugar Exports Despite a Bumper Crop

India is the world’s second-largest exporter of sugar. It has now imposed restrictions on exports of the sweetener amid rising inflation

Unlike wheat, there is not a complete ban on sugar. It can be exported, but from 1 June traders have to secure permission for sale overseas.



In a significant decision, the government has placed restrictions on the export of sugar. The decision comes days after all wheat exports were banned.

Why has India imposed curbs? And what will be its impact on the world? We take a look.


The sugar restrictions

India is the world’s biggest producer of sugar and the second-largest exporter after Brazil.


The government Tuesday announced restrictions on exports of sugar from 1 June. “Export of sugar (raw, refined and white sugar) is placed under restricted category from June 1, 2022 onwards,” the Directorate General of Foreign Trade (DGFT) said in a notification.

The government has decided to allow the export of sugar up to 100 LMT (lakh metric tonnes) to maintain the domestic availability and price stability during the sugar season 2021-22 (October-September), it added.


According to the order, with effect from 1 June, 2022 until 31 October, 2022, or until further order, the export of the sugar will be allowed with specific permission of the Directorate of Sugar, Department of Food and Public Distribution.

Unlike wheat, there is not a complete ban on sugar. It can be exported, but from 1 June traders have to secure permission for sale overseas.


This is the first time in six years that India has capped sugar exports.

The reason behind the curbs


The restrictions have been introduced to improve the availability of sugar in the domestic market and also check the rise in prices.

The move to limit the export of sugar comes at a time when retail inflation in April has surged to an eight-year high of 7.79 per cent.

The government’s worry is low stocks at the beginning of next season, which starts in October. A shortage of backup stocks during this time can push prices in the domestic market, according to a report by The Indian Express.

The restrictions are also another sign of rising food protectionism around the world, as major producers curb agricultural exports, adding to the supply shock triggered by Russia's invasion of Ukraine in February.

The crop and production

The country has had a bumper sugarcane crop. The plentiful monsoon in 2021-22 resulted in the area under sugarcane cultivation in Maharashtra, which is the top sugar producer in the country, growing 22 lakh hectares over the previous year. The state is set to produce 138 lakh tonnes of sugar, which is 30 per cent higher than the previous year, according to a report in The Times of India.

Sugar production in India has increased by 14 per cent to 34.2 million tonnes (MT) so far in the ongoing 2021-22 marketing year and is expected to touch a record of 35.5 MT. The country's sugar output stood at 31.1 MT in 2020-21, 25.9 MT in 2019-20, 32.2 MT in 2018-19 and 31.2 MT in the 2017-18 marketing year.

“India for the first time has witnessed record production of net sugar of 34.2 million tonnes till April 2022,” the National Federation of Cooperative Sugar Factories (NFCSF) said.

India’s exports

In sugar season 2020-21, against the target of 60 lakh metric tonnes (LMT), about 70 LMT was exported, the Ministry of Consumer Affairs and Food Distribution said in a statement, adding that the major importing countries are Indonesia, Afghanistan, Sri Lanka, Bangladesh, UAE, Malaysia, and other African countries.

India’s sugar exports in 2021-22 grew 15 times to 70 lakh tonnes, according to the ministry.

The current season (2021-22) has seen millers enter into contracts to export 90 lakh tonnes of sugar. Out of this, 71 lakh tonnes of sugar have already left the country, reports The Indian Express.

The impact on the world

The export restrictions are likely to have a significant impact on the global sugar market given India is a major producer and exporter. It has the potential to impact prices worldwide, according to experts.

Mohit Nigam, head of Hem Securities, told The Economic Times that in the midst of a worldwide commodities-price spiral, India’s export limits can drive international prices higher. “Because of recent market corrections, followed by this news, most sugar stocks have plummeted 30 to 40 per cent from 52-week highs, but export restrictions will make more surplus sweetener accessible for domestic ethanol production, which is a primary government aim,” he said.

Speaking at the World Economic Forum in Davos on Tuesday, Union Commerce Minister Piyush Goyal said that “our export regulation should not affect global markets”. “We continue to allow exports to vulnerable countries and neighbours,” he added.

Russia’s invasion of Ukraine has shaken the commodity markets that will keep global prices high through the end of 2024, the World Bank said last month. Food prices are expected to soar by 22.9 per cent this year, driven by a 40 per cent rise in wheat prices, it added.

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