Sugar export curbs and their impact

The government recently decided to “restrict” the export of sugar, effective from June 1.

The latest curbs:

• The government has moved export of sugar from the ‘open category’, which requires no government intervention, to ‘restricted’ category.
• This means that export of sugar is allowed only with specific permission from the Directorate of Sugar, Department of Food and Public Distribution (DFPD), Ministry of Consumer Affairs, Food & Public Distribution.
• Also, the curbs come into effect from June 1 and will continue till October 31, or until further orders.

Need of such curbs:

• The move is primarily aimed at increasing availability of the commodity in the domestic market and curbing price rise.
• The government has been taking several measures to facilitate lowering of prices of commodities in the domestic markets amid an unprecedented rise in inflation fuelled by geopolitical tensions among other reasons.
• The government has decided to allow export of sugar up to 100 LMT (lakh metric tonnes) with a view to maintain the domestic availability and price stability during the sugar season 2021-22 (October-September)

How much did India export?

• With the bumper crops over the last four seasons, exports too boomed. The Centre also extended subsidies to millers to push sales abroad.
• In sugar seasons 2017-18, 2018-19 and 2019-20, only about 6.2 LMT, 38 LMT and 59.60 LMT of sugar was exported.
• However, in the sugar season 2020-21 against a target of 60 LMT about 70 LMT have been exported.
• The government has expressed its concerns regarding this and said that the move to restrict sugar export was aimed at safeguarding the interests of consumers and keep the prices in check.
• The current season (2021-22) has seen millers enter into contracts to export 90 lakh tonnes of sugar.
  • Out of this, 71 lakh tonnes of sugar has already left the country.
  • The consignments scheduled to leave after June 1 will need government permission.