Image Source: Agencies

India will ban factories from exporting sugar for the next season in early October, cutting off supplies for the first time in seven years, as a lack of rain reduced the sugarcane harvest, three government sources said.
India's absence from the global market would likely push up benchmark prices in New York and London, which are already at multi-year highs, raising fears of continued inflation in global food prices.


"Our main focus is to meet local sugar requirements and produce ethanol from excess rust," said the source, who asked not to be named due to official rules.
"In the next season, we will not have enough sugar to distribute to the export quotas."


India allowed mills to export only 6.1 million tons of sugar in the current season to September 30, after selling a record 11.1 million tons in the previous season. India imposed a 20 percent tax on sugar exports in 2016 to curb sales abroad.
The weather service said the highest cane-growing regions of western Maharashtra state and southern Karnataka state, which together account for more than half of India's total sugar production, saw average monsoon rains in the 50s, the data showed .

Defective rains will reduce sugar production in 2023/24 and even planting in 2024/25, said an industry official who declined to be named.
Local sugar prices rose to their highest level in nearly two years this week, prompting the government to allow mills to sell an additional 200,000 tonnes in August.
“Food inflation is a concern. The recent rise in sugar prices will wipe out potential exports," another government source said.

Retail inflation in India jumped to a 15-month high of 7.44 percent in July, and food inflation to 11.5 percent, a three-year high.
India's sugar production could decline by 3.3 percent to 31.7 million tons in the 2023/2024 season.
"We have allowed factories to export large quantities of sugar for the past two years," said a third government source. "But we also need to ensure adequate supplies and stable prices." India surprised buyers last month by banning exports of non-basmati white rice. New Delhi also imposed a 40 percent tariff on onion exports last week as it tries to calm food shortages ahead of state elections this year.

The Mumbai-based trader, which has a global trading hub, said the decline in Thai production is also expected to reduce shipments, and top producer Brazil alone will not be able to fill the shortfall.