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Tags Current Affairs

Export curbs on sugar

Date: 27 May 2022 Tags: Agriculture

Issue

Export of sugar will be restricted by the government from June 1st. This will be the first such move in the last four years.

 

Background

The move has been necessitated to maintain domestic availability and price stability of sugar.

 

Details

India is currently the largest producer of sugar in the world and the second largest exporter after Brazil.

 

Changes made

  • Sugar has been moved from ‘open category’ to ‘restricted’ category. Earlier there was no need for government intervention. The move will be valid till October 31st.

  • The new rule will mean that specific permission from the Directorate of Sugar, Department of Food and Public Distribution (DFPD), will be needed for export.

  • Sugar export will not be completely stopped. However, permission will be needed from relevant authority before exporting.

  • Permission for exports will be needed for both the pending contracted quantity and any new contracts entered by mills.

 

Sugar export from India

  • Exports have been boosted in the past four seasons owing to bumper yields. The subsidies offered by the government to sugar mills have also helped.

  • In this financial year, millers have entered into contracts to export 90 lakh tonnes of sugar. Out of this, 71 lakh tonnes of sugar has already left the country.

 

Reasons for export growth

  • The largest exporter of Sugar, Brazil, has diverted cane for production of ethanol due to rise in fuel prices.

  • Another large producer, Thailand has seen fall in its sugarcane yield due to prevalent drought situation in the country.

 

Benefits of sugar exports

Sugar demand has been bullish. Export of sugar has helped millers to pay sugarcane farmers on time.

 

Reasons for export curbs

  • The production of sugar is high but the government is worried about low domestic stocks at the beginning of the next season.

  • If there is shortage of sugar in market, then prices may escalate fast. The growing inflation numbers have also worried the government.

 

Sugar production

  • India has about 521 sugar mills, with majority of them in Maharashtra. The country is expected to see production of 350 lakh tonnes of sugar.

  • About 260 lakh tonnes of sugar is consumed domestically and around 34 lakh tonnes of sugar has been subsumed for ethanol production.

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