The central government capped sugar exports at 100 lakh metric tonnes (LMT) with effect from June 1, raising fears of an increase in demand during the upcoming festive season, which could push prices higher. Food Secretary Sudhanshu Pandey said on Wednesday that India is witnessing record sugar production and the ban was a precautionary measure.
Food inflation hit a record 8.38% in April, prompting the government to ban wheat exports earlier in the month. In the case of sugar, the ban was imposed, rather than a ban, in order to avoid the problems faced during the sudden wheat export ban at ports, government officials said.
“We want to ensure two to three months sugar stock before the start of the new sugar crushing season. The average monthly domestic consumption is around 23 LMT, so we aim to hold 60-62 LMT of sugar stock at the start of the new crushing season in October.”
He said that the government is looking at keeping the prices stable, adding that the wholesale sugar prices in India are capped. 3,150 more 3,500 per quintal, while retail prices are also under control in the range of 36-44 in different parts of the country.
On questions about protectionism, the food secretary said it would be “simplistic” to call these moves protectionist and that each country prioritizes domestic needs over exports. “The idea is to have stable prices and not see unreasonable growth in the future,” he said at a news conference.
The export cap on sugar is significant as global demand for the commodity is rising, especially due to a decline in sugar production in Brazil, one of the world’s largest sugar producers. Amid high global demand, India’s sugar exports exceeded 10 million tonnes for the first time in FY12, up 65% over FY2011, official data showed.