The government of India has imposed an export ban on sugar from Wednesday with immediate effect. This ban will continue either until September 30 or till further orders. This is being done so as to ensure that there is enough supply of sugar within the country and also to regulate sugar prices.

This decision has been made by Directorate General of Foreign Trade, which is the part of the Ministry of Commerce & Industry. The export ban is applicable to raw sugar, white sugar, and refined sugar. Sugar will be considered as a prohibited good under the new policy. It was stated by the government that the ban on exporting sugar doesn’t apply to the European Union and the US.

According to a Reuters report, India has imposed the sugar export ban to control local prices. This move could support global white and raw sugar prices. This will allow rival producers like Brazil and Thailand to send more shipments to Asian and African buyers. India is the world's largest sugar exporter after Brazil.

It is worth noting that the central government had previously allowed mills to export 1.59 million tons of sugar. However, production is now expected to fall short of consumption for the second consecutive year. Sugarcane yields have weakened in major sugarcane-producing regions. El Niño weather conditions could disrupt this year's monsoon, increasing the risk that next season's production will be lower than initial estimates.

Of the 1.59 million tons approved for export, traders had contracted approximately 800,000 tons. More than 600,000 tons of this sugar has already been shipped. The government has stated a moratorium on the export of raw and white sugar. However, shipments already in the export pipeline will be allowed to proceed under certain conditions.

If loading had begun before the publication of the notification in the Official Gazette, shipments will be allowed. Exports will also be permitted if the shipping bill has been filed and the vessel has already arrived at an Indian port. If the sugar was handed over to customs or the custodian before the publication of the notification, the shipment will still be cleared. A Mumbai-based trader said that due to the additional export quota given in February, traders will now face difficulty in fulfilling export orders. New York raw sugar futures rose more than 2 percent after the ban was announced, while London white sugar futures jumped 3 percent.