India is the world’s largest producer of sugar and the second-largest sugar exporter after Brazil. With an area of 5 million hectares, sugarcane is cultivated in India on about 2.57 percent of the total cropped area. According to the DGCIS official data,* India had exported sugar worth US$ 1965 million in 2019-20, which rose to US$ 2790 million in 2020-21 and US$ 4600 million in 2021-22.
The sugar exports saw a substantial rise this season due to multiple factors. This prompted the Government of India to place restrictions on the export of sugar, stating that exports will be allowed only with the “specific permission” of the Directorate of Sugar and the Department of Food and Public Distribution. This means that the government will now have more control over how much sugar is exported from India. India capped the total exports of sugar at 10 million tonnes in a fiscal year.
In an effort to keep prices under control, the Indian government has announced restrictions on the export of sugar. In a press release, the government stated that the decision was taken in view of the current sugar prices in the country. This is the first time after 2016 that India has curbed the exports of sugar. The Directorate of General of Foreign Trade (DGFT) has notified that the export of raw, refined, and white sugar will be restricted from June 1 to October 31. This move is aimed at maintaining domestic availability amid rising food and fuel prices.
The Rationale Behind As Per The Government
After taking into consideration the unprecedented growth in Sugar Exports, the government decided to regulate these exports in order to maintain sufficient stock levels in the country. Explaining the motive behind the decision – the government said it curbed sugar exports in order to safeguard the interests of the country’s citizens by keeping the prices of the. Reasons Behind Government of India’s Decision To Cap Sugar
Commodity Under Control.
Moreover, there’s a need for sugar exports to be restricted so that the reserve stocks can be dispersed in the local market as per the demand. This will ensure the sugar reserves of 60-65 LMT which will keep the local demands in check for two-three months.
Sudhanshu Pandey, the Secretary to the Department of Food and Public Distribution* ensured that keeping a reasonably sufficient reserve of sugar for consumption is the priority of the government. He added that October and November are festival months and thus ensuring adequate quantities of sugar for meeting domestic needs is paramount for the government.
Notably, the decision to regulate sugar exports comes at a time when India has set a new record for sugar production and sales in world markets. According to the Indian Sugar Mills Association, sugar exports in FY 2021-22 stood at 8.6 million tonnes which marks a substantial milestone for sugar exports in India. So, in order to keep sugar prices under
control and maintain sufficient stocks of sugar in the country, the Government of India decided to regulate sugar exports.
However, sugarcane farmers in India are not really convinced by the rationale behind the decision. They believe, although, the prices in the domestic market would be stable yet they will not get a good price for their produce.
Conclusion
India’s move on capping sugar exports at 10 million tonnes was a result of an unprecedented rise in the sugar exports. The GOI took this decision to ensure sufficient sugar reserves for domestic consumption and to allow the prices to stabilise in the local market.
While the countries importing sugar from India along with other market players in the global market criticised India’s move on imposing restrictions on sugar, India made this move prioritising domestic sugar reserves and to maintain a seamless domestic supply thereby stabilising prices. Reasons Behind Government of India’s Decision To Cap Sugar
*Source: Press Information Bureau of India
