Only a month ago, the Indian government had rejected the fears of banning the export of sugar. Now the central government has banned the export of sugar for the next four and a half months. This means that Indian businessmen will no longer be able to send their sugar to other countries. If this ban is not applicable on America and European Union, sugar can be sent to these countries. This order has been issued on Wednesday itself and it has been implemented with immediate effect. The government has also said that already scheduled deliveries will not be stopped.
The government has said that the sugar which has been loaded on any ship before this notification is issued i.e. before the order comes into force, will not be stopped. Also, export of sugar sold under the Advance Authorization Scheme will continue. The Central Government has said that this order will be applicable to white sugar, brown sugar and refined sugar.
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Why are America and Europe exempted?
According to the order issued by the Ministry of Commerce and Industry of the Central Government, now sugar has been removed from ‘Restricted’ category and placed in ‘Prohibited’ category and this order will remain in force till at least 30 September. America and European Union will get exemption in this. The reason for this is that there are some agreements between India and the European Union and under these agreements, a CXL quota has been set under which Europe has to give sugar. Similarly, America has got exemption under Tariff Rate Quota (TRQ) and export of sugar to America will continue.
Government’s U-turn?
Last month, on April 7, a question was asked regarding the possibility of banning the export of sugar. Then Union Food Secretary Sanjeev Chopra had said that the marketing season of 2025-26 will end in September and it is expected that despite the extraction of sugarcane for ethanol, 320 to 325 lakh tonnes of sugar can be produced. He also said that the target is to export 15 lakh tonnes of sugar in this marketing year but it will be challenging to achieve it.
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Then Sanjeev Chopra had said that there is no plan to ban the export of sugar. He had also said that businessmen associated with the sugar industry have been demanding to increase the minimum price of sugar for a long time and this is also being considered. At present the price of sugar is at least Rs 31.
How big is the sugar market?
India is the second largest sugar producer and exporter country. At the same time, India is the largest consumer in terms of sugar consumption. According to the data available on the website of All India Sugar Trade Association, an average of 33 million metric tons of sugar is produced in India every year. At the same time, sugar consumption in India is about 28 million metric tons. This is the reason why every year businessmen demand to fix the quantity of sugar export so that decisions regarding export of sugar can be taken accordingly.
There has been a slight decrease in the production of sugar this year, hence this decision is being seen in connection with that also. This has happened many times in the past also when export of sugar has been banned in India due to low production.
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Where does India’s sugar go?
India’s largest export of sugar is from Djibouti and about 1.46 lakh tonnes of sugar is sent annually. Similarly, 1.35 lakh tonnes of sugar is sent to Somalia and 1.34 lakh tonnes of sugar is sent to Sri Lanka. Countries like Afghanistan, UAE, Tanzania, Bangladesh and China also buy sugar from India in large quantities.
If we look at the export of sugar to America and European countries, it is quite less. Together, only 10 to 15 thousand metric tons are exported annually.
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