India’s Ministry of Commerce has just announced that the country will be placing an export ban on all domestically produced sugar beginning April 1, 2016. This is no small decision as India’s sugar industry stands to lose nearly $1 billion as a result of this policy change, but what will be the implications for the rest of the world’s sugar market? In this article, we’ll explain why India has decided to place an export ban on sugar and what other countries may do as a result of this action.
Sugar prices have been on a steady rise over the past few months, lack of supply is the reason. But the demand for Indian sugars has seen an overwhelming increase from global markets. This is due to the shortfall in production in Brazil, which has led to exports at lesser margins. The fall in the value of the Rupee has also been beneficial to Indian exporters.
An important agro-based industry, sugar is a big business in India. Around 50 million sugarcane farmers and 5 lakh workers are directly employed in sugar mills in the country. Employment is generated through ancillary activities pertaining to transport, servicing of machinery, and supply of agricultural inputs as well.
The second largest producer of sugar, India contributes around 20% of the global supply. There are around 5 crore farmers employed and thousands of mills all across the country manufacturing and supplying sugar to cater to our sweet tooth. This is an emerging sugar industry in the country that we are talking about here.
The sugar industry comprises the production, processing and marketing of sugars. Sugar beets and sugarcanes have the largest percentages of sugar among different types of plants. This is why they are the most preferred choices when it comes to extraction. The global sugar market attained a volume of 193.2 million tons in 2020. This growth is expected to continue with the forecast for 2026 by independent market research firms to be around 202.1 million tons.
The foods and beverages industry is prone to ups and downs in financial terms. However, over the last decade, the Agri-commodity sector has witnessed constant growth. Especially, if we particularly talk about the Sugar Exports market.
The global sugar trade is around 64 million tons per year. Raw sugar accounts for around 60% of worldwide commerce volumes. Although more than 120 nations produce sugar, the top 5 Sugar Exporting Countries (Brazil, Thailand, India, Australia, and Guatemala) accounted for approximately 70% of global commerce in 2016-18.
Sugar is derived from two major crops: sugarcane and sugar beet, which are grown in various regions across the world. Sugar beet grows best in chilly, wetter climates. There are more than 120 Sugar Producing Nations around the globe.
Sugar is a kind of carbohydrate that the body uses to produce glucose. They are a source of energy for us.
It can be found naturally in some foodstuffs, such as fruits and dairy products, and is also added to a wide range of foods. However, the most common crop used for extracting Sugar used in our daily lives is Sugarcane. It contributes 80% of the World’s Sugar Production.