Unlike wheat, there is no complete ban on sugar export. But from June 1, traders have to secure permission for sale overseas.
After wheat, now the Indian government has placed restrictions on the export of sugar. The Directorate General of Foreign Trade's notification says that the new restrictions will come into effect from June 1. This is basically a move to curb inflation by increasing the availability of the commodity in the domestic market. This will in turn automatically bring down the high price.
The government has been taking several measures to lower prices of essential commodities in the domestic markets amid an unprecedented rise in inflation resulting due to severe heatwave, the ongoing Russia-Ukraine war, rising fuel prices among many others.
Read | DNA Explainer: How world is reacting to wheat export ban by India amid Ukraine war
"As per the order issued by DGFT, with effect from June 1, 2022 till October 31, 2022, or till further order, whichever is earlier, the export of the sugar will be allowed with specific permission of the Directorate of Sugar, Department of Food and Public Distribution," the notification read. So here we look into the reasons for the restrictions on the sugar export and the impact on the world.
What led to restrictions on sugar export?
Unlike wheat, there is no complete ban on sugar export. But from June 1, traders have to secure permission for sale overseas.
India is the world's biggest producer of sugar and the second-largest exporter of the commoditity, next only to Brazil.
Export of sugar (raw, refined and white sugar) is placed under restricted category from June 1, 2022 onwards.
Government has decided to allow the export of sugar up to 100 LMT (lakh metric tonnes) to maintain the domestic availability.
The restrictions have been introduced to improve the availability of sugar in the domestic market and also check the rise in prices.
India has seen record inflation in the past month amid a price surge in food and oil and these are the steps to control it.
The move to limit the export of sugar comes at a time when retail inflation in April has surged to an eight-year high of 7.79%.
The restrictions are also another sign of rising food protectionism around the world, as major producers curb agricultural exports.
How much India produces sugarcane?
Maharashtra, which is the top sugar producer in the country, grew 22 lakh hectares over the previous year.
The good monsoon in 2021-22 resulted in the area yielding record sugarcane cultivation.
Maharashtra is set to produce 138 lakh tonnes of sugar, which is 30% higher than the previous year, as per report.
Sugar production in India has increased by 14 % to 34.2 million tonnes so far in the ongoing 2021-22 marketing year.
This is expected to touch a record of 35.5 MT. The country's sugar output stood at 31.1 MT in 2020-21.
The sugar output was 25.9 MT in 2019-20, 32.2 MT in 2018-19 and 31.2 MT in the 2017-18 marketing year.
India for the first time has witnessed record production of net sugar of 34.2 million tonnes till April 2022.
This figure is as per the National Federation of Cooperative Sugar Factories (NFCSF) data.
Wholesale prices of sugar in India are range bound between Rs 3,150-3,500 per quintal, DGFT statement said.
Retail prices are in the range of Rs 36-44 per kilogram in different parts of the country, the statement added.
How much India exports sugar?
As per Ministry of Consumer Affairs and Food Distribution, in 2020-21, about 70 LMT was exported against the target of 60 lakh metric tonnes.
The major importing countries are Indonesia, Afghanistan, Sri Lanka, Bangladesh, UAE, Malaysia, and other African countries.
India's sugar exports in 2021-22 grew 15 times to 70 lakh tonnes, according to the Ministry of Consumer Affairs and Food Distribution.
Impact on the world
The export restrictions are likely to have a significant impact on the global sugar market given India is a major producer and second largest exporter.
India's export limits of sugar can drive international prices higher. However, India has said that it will continue exports to vulnerable countries and neighbours.
Union Commerce Minister Piyush Goyal said at the World Economic Forum in Davos that export regulation should not affect global markets.
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