India to put limitations on sugar exports.
Sugar is one of the key exports of India and millions of tonnes of sugar is exported every year by India. India is the largest producer of sugar and also the second largest exporter of sugar after Brazil. Sugar exports have increased by almost 65% in the year 2021- 2022 with respect to the previous year despite of facing the Covid- 19 trouble. Sugar exports in India surged to $4.6 billion in the financial year 2021- 2022.Since it is exported on such a large scale, it has the potential to impact worldwide prices. Keeping this in mind the government of India recently decided to impose some restrictions on sugar exports. Sugar exports will be capped at 10 million tonnes during the marketing year which starts during September- October. This initiative also seeks to improvise the need and availability of sugar in the domestic market and tackle the constant rise in the prices of local products. The Directorate General of Foreign Trade said that the export of sugar whether raw, refined or white sugar must be placed under restricted category from June 1, 2022. With a view to maintain the availability of sugar in the domestic market and to control the price stability during the sugar season, the government of India has decided to permit the export of sugar up to 100 lakh metric tonnes. Due to Russia-Ukraine war, global oil prices are at their peak. With an increase in global oil prices and the increasing need for ethanol production, the demand for Indian sugar has also went up considerably. The restrictions on sugar exports will help domestic players and markets focus more on ethanol production. The stocks of sugar companies also took a quick blow after the government decided to curb sugar exports. Top Indian sugar stocks like Shree Renuka Sugars and Balrampur Chini Mills took a quick knock after this decision. As India is one of the top players in the sugar market, a halt in the exports will significantly affect the global commodity markets. Sugar supply was in surplus in the international markets and thus the prices were comparatively low. Now the restrictions imposed by the Indian government, previously in wheat and now in sugar might bring a rise in the global food prices.