India's Easing of Sugar Export Rules Could Further Pressure Global Prices

India, the world’s biggest sugar consumer, is struggling to manage overflowing domestic stocks.

In the measures on Wednesday, the government also said millers that export sugar this season would be allowed duty-free imports of raw sugar for the following two seasons through September 2021.

The government has written to sugar mills to say the export quota for the sector has been set at 2 million tonnes, according to a letter seen by Reuters.

India is likely to produce a record 29.5 million tonnes of sugar in the 2017/18 season ending on Sept. 30, up 45 percent from the previous year.

Reuters reported earlier this month that the government was planning to bring in rules to force sugar mills to export millions of tonnes of surplus supplies to prop up local prices.

India’s attempt to cut its local stocks comes as global sugar prices are trading at around 2-1/2-year lows.

One sugar mill owner, who did not wish to be identified, said the new measures would not help him much.

“Global sugar prices are too low and mills will incur a loss of at least $150 a tonne,” the mill owner said.