JOIN USIndia caps sugar export to control domestic prices
In a first in six years, India has capped sugar exports to 100 lakh tonne a year from June 1 to keep a lid on local prices to prevent a surge in domestic prices after mills sold a record volume on the world market, a government order said.
“The government has been continuously monitoring the situation in the sugar sector including sugar production, consumption, export as well as price trends in wholesale and retail markets all over the country,” the commerce ministry said.
It said the government is committed to maintaining stable prices of sugar in the domestic market and in the last 12 months, prices of sugar are under control.
Wholesale prices of sugar in India are range-bound between Rs 3,150 and Rs 3,500 a quintal while retail prices are also within control in the range of Rs 36-44 in different parts of the country. The step has been taken considering unprecedented growth in sugar exports and the need to maintain sufficient stock.
The government has also asked exporters to seek its permission for any overseas shipments between June 1 and Oct. 31, the order said.
India is the world's biggest sugar producer and the second biggest exporter behind Brazil.
Benchmark white sugar prices in London jumped more than 1% after India's decision.
"The government is worried about food inflation, and that's why it is trying to ensure that enough sugar remains in the country to cater to the festival season," said a Mumbai-based dealer with a global trading firm.
Exporters also said the decision to allow mills to export 100 lakh tonnes would help India sell a reasonably big quantity of sugar on the world market.
Initially, India planned to cap sugar exports at 80 lakh tonnes, but the government later decided to allow mills to sell some more sugar on the world market as production estimates were revised upwards.
Indian mills have so far signed contracts to export 91 lakh tonnes of sugar in the current 2021/22 marketing year without government subsidies. Out of the contracted 90 lakh tonnes, mills have already dispatched around 82 lakh tonnes of the sweetener.
(With Reuters inputs)