Sugar shipments from India, the world’s second biggest producer, have slowed as domestic prices hit a 15-month high after the government announced a subsidy for raw sugar exports in February. Exports for the six months through September are expected to be 300,000 tons compared to the 1.5 million tons shipped in the prior six month period. In February the Indian government set a subsidy of $55 per ton on raw sugar to help mills clear dues to farmers after stockpiles hit a five-year high, but has yet to notify the aid for April or May. The announcement drove domestic prices above global rates, turning away buyers. Sugar output in India will total 23.8 million tons for the twelve months ending September 30 compared to 25.1 million tons a year earlier– the lowest level in four years after excessive rains cut yields. Inventories will also drop to 6 million tons as of October 1 compared to 9.3 million tons last year.
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