India’s decision worsening the global market

07/11/2022

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India’s decision worsening the global market

As India reducing its sugar export quota for 2022-23 it will potentially worsening the global market which has already strained by supply hiccups in top shipper Brazil. India export sugar to most of the global market that is most significant for world population and world economy as well.

According to the food ministry notification, the South Asian nation directed to the millers to sell 6 million tons in the overseas market by May 31 in next year. This guideline is indicating it may still permit more shipments through October 2023. The quota for 2021-22 totaled 11.2 million tons.

Demand side disturbance:

India’s recent reduced export quota comes at a time when the world is already demanding acutely for supplies, with Brazil witnessing excessive rains and delays in sugar cane crushing. The demand of Raw sugar in New York have increased more than 6% since late October, and could strengthen further following the announcement by India that competes with Brazil as the top producer.

Supply side disturbance:

India is considering allotment of exports of 6 million tons in a first tranche and another about 3 million in a second on the basis of the pace of production.

Shipments from the South Asian nation exploited to be unregulated, but the country capped limits from last year to ensure sufficient local supply after output concerns.

Special quota of exports:

The government had extended the curbs until October next year but the restrictions don’t apply to sales to the EU and the US under some quotas.

According to the Indian Sugar Mills Association Production, India might be produced 35.5 million tons of sugar this year.

Top 5 sugar producers in the world:

Number	Country
1	Brazil
2	India
3	Thailand
4	China
5	USA

Top consumer countries:

The country weighs Indonesia, Bangladesh, Malaysia and the United Arab Emirates among its customers.

India is one of the world’s biggest consumers of sugar.

Indian sugar mills have already shrank to export as much as 2.2 million tons which traded about 500,000 tons of sugar in the domestic and overseas markets in the 2021-22 season.