Government of India had imposed restrictions on sugar exports effective from June 1 to control prices and maintain adequacy of sugar in domestic market. Now GOI has approved export of 1.2 MT extra sugar this season as high production next season is expected. This season 10 MT sugar has already been exported and this new quota is additional. Thus total sugar outflows will be 11 MT this season making it highest ever. This new quota is a recent approval of group of ministers.
FE was informed by a agriculture ministry source that opening stock of 2022-23 season will be 6-6.5 MT that can easily meet the requirement of festive season of October and November despite new quota of exports. This additional quota has provision for sugar export to requesting countries like Sri Lanka, Nepal and Maldives. In 2021-22 season, expected Indian sugar production is 36 MT. UAE, Afghanistan, Somalia, Indonesia, Nepal and many other countries have imported sugar from India this season. Before this additional quota was approved, ISMA (Indian sugar mills association) had requested the government to permit export of 1 MT sugar to facilitate commitment fulfillment by mills.
Sugar mills have demanded that government allows export of 8 MT sugar under OGL (open general license) in next season. ISMA believes this is necessary to help sugar mills get contracts in advance, before season starts.
ISMA president Aditya Jhunjhunwala, through a recent communiqué to commerce minister Piyush Goyal, demanded revision of sugar export policy currently existing, in light of firm global sugar prices. Jhunjhunwala opined that advance exports contracts will go a long way in ensuring better cash flows ensuring seamless disbursement to farmers next season. Government on its part is still pondering about fixing quota of export of sugar for next season.
Government of India’s policy related to sugar exports has been uneven. First government of India imposed restrictions on sugar imports and then announced new export quota. Despite government adopting quota system sugar exports from Indian shores this season has been highest ever. India’s sugar exports rose by 64% in 2021-22 fiscal despite restrictions and since 2013-14 fiscal sugar exports has risen by whopping 291%. For the first time sugar exports have exceeded 10 MT. Astounding growth in 2021-22 fiscal was despite logistical challenges posed by Covid 19. In 2021-22 (April to February), sugar outflows to Indonesia was worth $769 million, sugar outflows to Sudan was worth $530 million, sugar outflows to Bangladesh was worth $561 and sugar outflows to UAE was worth $270 million. Other countries where Indian sugar reached were Saudi Arabia, Somalia, Malaysia, Afghanistan, Sri Lanka, Pakistan, Nepal, China, Singapore, Oman, USA and many more. 80% of Indian sugar production happens in Maharashtra, Uttar Pradesh and Karnataka. Brazil is the only country ahead of India in sugar production. In 2019-20 fiscal, India exported mere $1965 million worth of sugar. Exports rose to $2791 million next fiscal of 2020-21 and $4600 million in 2021-22 fiscal by value.