India, the world’s largest consumer of sugar, is considering extending its ban on sugar exports for a second year in a row as it deals with the possibility of reduced cane production, according to official sources.
According to people with direct knowledge of the situation, New Delhi also intends to increase the price at which oil firms purchase ethanol from sugar mills in an effort to increase the amount of the biofuel available.
The removal of India from the global market will further reduce global supply, supporting benchmark prices in London and New York.
Brazil is the world’s largest producer and supplier of sugar, and New Delhi intends to forbid mills from exporting the sweetener when supplies from the country, are anticipated to decline due to the country in South America experiencing a drought.
One of the official sources stated, “There is no space for sugar exports in the current crop scenario. After fulfilling the local sugar demand, our next priority is ethanol blending, and we need much more cane to meet the ethanol blending targets.”
India wants to raise the percentage of ethanol in gasoline from 13%–14% to 20% by 2025–2026 in an effort to reduce carbon emissions. In recent years, several Indian sugar mills, including E.I.D.-Parry, Balrampur Chini Mills, Shree Renuka, Bajaj Hindusthan, and Dwarikesh Sugar, have expanded their capacity to produce ethanol.
According to insiders, the government is also thinking about raising the procurement price of ethanol by more than 5% for the upcoming November selling season. A government decision issued late last month stated that sugar mills in India would be permitted to begin producing ethanol from cane juice or syrup in November.
India’s plans to extend a ban on sugar exports and raise domestic ethanol prices have not been previously reported. Both measures are likely to be announced later this month.
