India announced a sugar export ban, and Malaysia halted shipments of chicken as the global food crises escalated.
Like many others in the region, both countries suffer from high inflation. Each respective government and central bank seeks to suppress inflation, and what appears to be the move at the moment (besides raising interest rates) are protectionist measures.
If inflation continues to run hot in these countries, the risk of socio-economic turmoil increases.
Bloomberg reported earlier that sources expected a sugar export ban from India capped at ten million tons during the current sugar season (2021-22).
The Indian government announced the new trade restrictions late in the US trading session. Following India’s lead, Malaysia announced trade restrictions on chickens to curtail rising prices.
“Taking into consideration unprecedented growth in exports of sugar and the need to maintain sufficient stock of sugar in the country as well as to safeguard interests of the common citizens of the country by keeping prices of sugar under check, Government of India has decided to regulate sugar exports from June 1, 2022,” India’s Consumer Affairs Ministry said.
India is the second-largest sugar exporter behind Brazil. Its largest customers include Bangladesh, Indonesia, Malaysia, and Dubai.
The ministry will allow only 10 million tons of sugar exports for the season that ends in Sept. 2022. Sugar mills have already contracted 9 million tons, and a record 7.8 million tons have already been shipped.
India’s curbs on sugar exports follow another protectionist step as wheat exports were restricted earlier this month. The government is trying to get a handle on soaring food inflation by ensuring adequate domestic supplies.
Malaysia will stop the export of 3.6 million whole chickens a month until production and prices stabilise, Prime Minister Ismail Sabri Yaakob said on Monday (May 23).
This will start on June 1.
Breaking: After banning wheat export, India curbs sugar export to 10 mn tonne this season, another protectionist step as the country battles runaway inflation. Consumers prices in April climbed to an 8-yr high of 7.79%, overshooting the .@RBI’s target of 6% for 4 straight months.
— Zia Haq (@ziahaq) May 24, 2022