Sunday, June 26, 2022

Sugar exports curb precautionary step to ensure supply in festive season: Govt

Govt said it has taken a "timely and precautionary" measure to ensure adequate availability of the sweetener during the festival season

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New Delhi: Justifying the decision to cap sugar exports at 10 million tonnes this year, Food Secretary Sudhanshu Pandey on Wednesday said the government took a “timely and precautionary” measure to ensure adequate availability of the sweetener during the festival season in October-November and to maintain price stability.

Although prices of sugar are “more stable” when compared to other commodities, the decision to curb sugar exports was taken to prevent any undue spike in retail prices amid a global shortage of the commodity, he said.

Pandey also mentioned that India has emerged this year as the world’s largest sugar producer, toppling Brazil which faced a shortage of output this year. India is also the second-largest sugar exporter in the world.

On May 24, the government notified capping of sugar exports to 10 million tonnes in the ongoing 2021-22 marketing year (October-September). Shipments will be allowed with special permission between June 1 and October 31.

Addressing the media, the Food Secretary said, “Sugar exports have risen sharply from about 50,000 tonnes in 2016-17 to 10 million tonnes this year. Please take it out of mind that it is any kind of curb.”

The country’s sugar exports this year are the highest ever. Already 9 million tonnes of sugar have been contracted, out of which 7.5 million tonnes have been exported, he said.

Sugar exports stood at a record 7 million tonnes in the 2020-21 marketing year.

The curbs had to be imposed to ensure enough availability of sugar during the festival season in October-November, which is also the beginning of the new sugar marketing year and when domestic demand of sugar is met from old stocks, he said.

About 6-6.2 million tonnes of sugar would be the closing stock at the end of the current marketing year, just the optimum level to meet the domestic requirement in October-November, he said.

On top of it, the global availability of sugar is less due to shortage in Brazil, he said, and noted that given this backdrop the restrictions had to be imposed to maintain domestic availability and price stability.

Pandey also said the curbs on sugar exports was “timely and a precautionary step” as industry body ISMA also feels that not more than 10 million tonnes of sugar can be exported this year.

Currently, sugar prices both in wholesale and retail markets are more stable when compared to other commodities. The restrictions on sugar exports will prevent speculation and undue price spike, he said.

While ex-mill prices of sugar are ruling at Rs 32-33 per kg, the retail prices are hovering between Rs 33-44 per kg depending on the region, he added.

Sugar production at 35.5 million tonnes is the highest in the world this year, after discounting diversion of 3.5 million tonnes for ethanol. The availability is higher than the domestic requirement of 27.8 million tonnes.

Pandey also said the diversion to ethanol making and exports have helped mills clear 85 per cent of the cane dues amount of Rs 1,09,283 crore in the 2021-22 marketing year. The pending cane dues of the last two years have narrowed down.

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