India restricts its sugar exports to 10 million tons in the current season to help maintain local availability and stabilize prices.

The decision follows a similar one for wheat and comes amid indications of shrinking global supplies. India is the second largest producer, after Brazil, and the largest consumer of sugar in the world, according to the All India Sugar Trade Association. It is the second largest sugar exporter. Export restrictions are the first in six years.

India exported a record 7 million tons in 2021 and estimates vary but the country is expected to produce more than 30 million tons in this growing season, with domestic consumption estimated at around 28 million tons, and local reserves at about 8 million tons. The government said in a statement that in the current sugar season between June and October, export contracts for about 9 million tons have been signed and 7.8 million tons have already been exported.

It added that sugar mills and exporters will need government approval for exports starting next month. Sugar consumption tends to rise during the major festival season in India from September to November. Sugar prices have remained relatively stable, but the retail inflation rate jumped to an eight-year high of 7.8% in April.

The government announced tax cuts on gasoline, diesel, and coke coal in an attempt to reduce inflationary pressures. Earlier this month, India also announced it will not export wheat to food-deficit countries except through government channels. Private companies are allowed to fulfill their previous commitments to export nearly 4.3 million tons of wheat until July.

India exported one million tons of wheat in April. One of the main goals of export restrictions is to control rising domestic prices.

Global wheat prices have risen by more than 40% since the beginning of the year. Meanwhile, India’s wheat crop suffered a record heatwave that halted production.

Before the war, Ukraine and Russia accounted for one-third of global wheat and barley exports.

Since the Russian invasion, Ukrainian ports have been closed and civil infrastructure and grain silos destroyed.