India will take a big decision on sugar after 7 years, lest the world get worried - Newztezz Online


Thursday, August 24, 2023

India will take a big decision on sugar after 7 years, lest the world get worried

The Government of India has decided to ban the export of sugar after a long gap of 7 years. Due to lack of rain, the sugarcane crop has decreased and this step is being considered to meet the domestic requirement.

Government of India can take a big decision after 7 years due to low production of sugarcane due to uneven rains in the country. According to three government sources, India may refuse to export sugar to mills in the next season starting from October. So that the needs of the country can be fulfilled and the prices do not increase. In the last one month, a similar decision has been taken with wheat, rice and pulses in India. After its decision, trouble can be seen in the rest of the world. Due to non-availability of Indian sugar in the global market, sugar prices in New York and London can see an increase, which is already at multi-year high. After this decision, the possibility of further increase in inflation in global food markets will increase.

There will be no export quota next season

Our primary target is to meet local requirements and produce ethanol from surplus sugarcane, said a government source on condition of anonymity as per official norms. For the coming season, we will not have enough sugar to allocate the export quota. India allowed mills to export only 6.1 million tonnes of sugar during the current season till September 30, compared to a record 11.1 million tonnes they were allowed to sell in the previous season. In 2016, India imposed a 20 per cent tax on sugar exports to curb overseas sales.

50 percent less rain

Monsoon rains have so far been 50 per cent below average in the top sugarcane-producing districts of the western state of Maharashtra and the southern state of Karnataka – which account for more than half of India's total sugar production, according to the Meteorological Department. An industry official, who did not wish to be named, said that less rains would cut sugar production in the 2023/24 season and even reduce planting for the 2024/25 season.

Inflation at 15 months high

Local sugar prices this week rose to their highest level in nearly two years, allowing the government to sell an additional 200,000 tonnes to mills in August. Another government source said that food inflation is a matter of concern. The recent increase in sugar prices has wiped out the possibility of exports. Retail inflation in India reached a 15-month high of 7.44 per cent in July and food inflation also came down to 11.5 per cent, the highest in three years.

Decision was also taken on onion and rice

India's sugar production could fall by 3.3 percent to 31.7 million tonnes in the 2023/24 season. The third government source said that during the last two years, we have allowed mills to export sugar in large quantities. But we need to have adequate supply and stabilize prices. India surprised buyers last month by banning exports of non-basmati white rice. The central government had also imposed 40 per cent duty on onion exports last week. In fact the government is trying to bring down food inflation ahead of the state elections later this year.

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