The central government on Tuesday announced new measures to pacify food inflation, including restricting sugar exports from June 1 and allowing duty-free imports of soybean and sunflower oil.
The consumer affairs ministry said it would allow export of 10 million tonnes of sugar annually from next month. Earlier in the day, the finance ministry allowed duty free imports of 2 million tonnes per annum for crude soybean oil and crude sunflower oil. The relief on edible oil has come into effect from Wednesday and will be effective till March 2024.
“Keeping in view the unprecedented growth in the export of sugar and the need to maintain adequate stocks of sugar in the country, as well as the need to protect the interests of the common citizens of the country by keeping the sugar prices under control. The Center has decided to regulate sugar. Exports from June 01,” an official statement said.
India is the world’s second-largest sugar producer after Brazil, and sugar exports exceeded 10 million tonnes for the first time in FY2012, a 65% increase over FY2011, official data showed.
Earlier, the government had offered relief on crude palm oil and pulses and banned wheat exports to reduce retail prices. The procedure for availing duty concession has also been specified in the order of the Finance Ministry on Tuesday. The immediate measures come at a time when food inflation rose to 8.38% in April from 7.68% in March.
India Sugar Trade Association (AISTA) president Prafulla Vithlani said the decision to limit sugar exports instead of ban has been taken to avoid problems faced by traders at ports when suddenly wheat export ban was announced.
“AISTA had suggested to the government that the opening stock of sugar should be 60 lakh tonnes. Having such stocks will prevent price hike even if we don’t have a healthy monsoon.”
Vithalani further said that the reason behind this move is to ensure that India has a comfortable stock on October 1 when the new season starts.
Experts further said that the increase in the price of sugar is not significant as compared to other commodities like wheat, where prices had increased by around 15% during the previous year, and the government decided to impose restrictions on exports.
“About 8.5-9 million tonnes have been contracted and around 720,000 tonnes have been shipped from September 1 to May 15 last year. The remaining 1.7-1.8 million tonnes of deliveries are in transit. The government is looking at the final figures.”
Mukesh Kuvadia, general secretary of the Bombay Sugar Merchants’ Association, said: “The government wants to be on the safe side and plans to have an opening stock of 6 to 6.5 million tonnes.”
Rituraj Barua contributed to the story.