The government is considering a proposal to permit factories to use an additional 800,000 tons of sugar for biofuel this year, as the crop is likely to be higher than predicted, said the person, who asked not to be identified as the talks are confidential.
The tailwinds from higher domestic prices and ethanol production will offset lower exports and improve realisations of sugar mill companies, said analysts
The Indian government has extended its restriction on export of raw sugar, white sugar, refined sugar and organic sugar under some codes beyond October, according to an order dated Wednesday.
A ban on Indian sugar exports, which has not happened in seven years, could drive up global benchmark prices, potentially increasing inflation in global food markets.