MUMBAI, May 24 (Reuters) - India has imposed restrictions on
sugar exports for the first time in six years by capping this
season's exports at 10 million tonnes, a government order said,
to prevent a surge in domestic prices after mills sold a record
volume on the world market.
The government has also asked exporters to seek its
permission for any overseas shipments between June 1 and Oct.
31, the order said.
India is the world's biggest sugar producer and the second
biggest exporter behind Brazil.
Reuters in March reported that India was planning to curb
sugar exports to keep a lid on local prices and ensure steady
supplies in the domestic market.
Benchmark white sugar prices in London jumped more
than 1% after India's decision.
"The government is worried about food inflation, and that's
why it is trying to ensure that enough sugar remains in the
country to cater to the festival season," said a Mumbai-based
dealer with a global trading firm.
Exporters also said the decision to allow mills to export 10
million tonnes would help India sell a reasonably big quantity
of sugar on the world market.
Initially, India planned to cap sugar exports at 8 million
tonnes, but the government later decided to allow mills to sell
some more sugar on the world market as production estimates were
The Indian Sugar Mills Association, a producers' body,
revised its output forecast to 35.5 million tonnes, up from its
previous estimate of 31 million tonnes.
Indian mills have so far signed contracts to export 9.1
million tonnes of sugar in the current 2021/22 marketing year
without government subsidies. Out of the contracted 9 million
tonnes, mills have already dispatched around 8.2 million tonnes
of the sweetener.
(Reporting by Rajendra Jadhav and Mayank Bhardwaj; Editing by
Chris Reese and Grant McCool)