India is not considering allowing sugar exports until at least the first half of the next season, as the government is worried the El Nino weather pattern could reduce rainfall and dent production, government sources said on Monday.

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India, the world's second-biggest sugar exporter, usually decides the amount of sweetener mills can export before the start of the new marketing year on Oct. 1. The delay in shipments from India could support global sugar prices, which are trading near multi-year highs.

"The weather is a big negative factor. Last year, despite good monsoon rains, sugar production fell. This year, with El Nino, we can't take the risk of allowing exports early," said a senior government official who did not want to be identified in line with official rules.

The El Nino weather pattern, which triggered most of the droughts that India faced during the past seven decades, could bring about extreme weather later this year.

"In any sugar season, it takes at least a few months to get a clear idea about production, and that's why we will wait until there's an absolutely clear picture about production," said another government official, who also declined to be identified.

"As far as exports are concerned, we will not be in any hurry at all."

A government spokesperson did not immediately respond to a request for comment.

At the start of the current sugar season on September 30, 2023, the industry pegged this year's output at 36 million tonnes, which has been scaled down to 32.8 million tonnes.

Due to the lower output, India allowed exports of 6.1 million tonnes for this season. As the quota is exhausted, India is currently not exporting sugar.

Even if India agrees to allow exports later during the 2023–2024 season, New Delhi may not allow more than 4 million tonnes, the officials said. The government is keen to control food prices ahead of some state elections in 2023 and a general election in mid-2024.

The country exported more than 11 million tonnes in 2021–2022, an all-time high.

The world needs more Indian sugar as soon as possible since global prices are trading near an 11-year high, said a Mumbai-based dealer with a global trade house.

"The delay in Indian exports will further lift prices, and will allow Brazilian sellers to demand even higher prices," said a Mumbai-based dealer with a global trade house.

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