India is expected to ban sugar exports in the next season beginning October, marking the fist in seven years for halting its shipment due to bad climate that causes a lack of rain, reported Reuters which cited three sources.
The exclusion of India’s shipment could give the sugar benchmark in New York SBc1 and London LSUc1 another push. Both are trading around multi-year highs. However, this also sparked fears of further inflation on the global food market.
At the current season, India allows mills to export only 6.1 million tons of sugar, which would end on September 30, a significant drop from a record of 11.1 million tons last season.
Sugar prices in India rose this week to the highest level in almost two years. Meanwhile, retail inflation in India hit a 15-month high of 7.44% in July and food inflation rose to 11.5%, the highest in over three years.
Brazil is the world’s biggest sugar exporter with 28.2 million tons in 2022/23, according to Statista. Thailand came in second place with 11 million tons and India at third.
Thai sugar stocks have yet to response to the report as Khon Kaen Sugar Industry Public Company Limited (SET: KSL) and Khonburi Sugar Public Company Limited (SET: KBS) closed flat in the morning session at THB3.08 and THB5.45 per share, respectively. Meanwhile, Kaset Thai International Sugar Corporation Public Company Limited (SET: KTIS) rose 0.51% to THB3.92 and Buriram Sugar Public Company Limited (SET: BRR) increased 2.88% to THB5.35 per share.