Context:
India has extended curbs on sugar exports due to concerns over rising prices and the impact of a weak monsoon on sugarcane crops.
About the Restrictions:
- The Directorate General of Foreign Trade has restricted exports of certain grades of raw, refined, and organic sugar.
- Sugar export has transitioned from the ‘open category’ to the ‘restricted’ category, necessitating specific permission from the Directorate of Sugar, Department of Food and Public Distribution (DFPD), Ministry of Consumer Affairs.
- The measure aims to ensure adequate domestic supply, controlling prices during the ongoing festival season and upcoming general elections.
- Global sugar prices surged due to the El Nino weather phenomenon impacting production in India and Thailand, as per the UN Food and Agriculture Organization.
Insights on Sugarcane:
- Indigenous to India from Bamboo family of plants, sugarcane is a primary source of sugar, gur, and khandsari.
- Roughly two-thirds of produced sugarcane is used for making gur and khandsari, with the remaining utilized by sugar factories.
- It serves as raw material for alcohol production and bagasse, the residue, can be effectively employed in paper manufacturing or as substitutes for petroleum and various chemical products.
Conditions for Growth:
- Sugarcane has a growth duration of 10-15 months, sometimes extending to 18 months based on geographical conditions.
- Tolerant to diverse soils retaining moisture, including loams, clayey loams, black cotton soil, and more. It thrives in nitrogen, calcium, and phosphorus-rich soil.
- Ideal climate: Hot and humid with 21-27°C temperature and 75-150 cm rainfall. Excessive or insufficient rainfall affects sugar content and crop quality.
Distribution:
- Predominantly cultivated in the Satluj-Ganga plain (51% area), Maharashtra to Tamil Nadu black soil belt, Coastal Andhra, and Krishna Valley.
Impacts:
- Economic Impact: Despite logistical COVID-19 challenges, India’s sugar exports surged by 291% since 2013-14. Restrictions aim to stabilize domestic prices amid global food and oil price hikes.
- Farmer and Consumer Impact: Export bans or duties, including on sugar, have led to implicit taxation of Indian farmers and influenced domestic sugar prices.
Conclusion:
- The decision to regulate sugar exports has far-reaching consequences for the economy, farmers, and consumers. Balancing domestic availability, price stability, and the sugar industry’s growth remains a complex challenge.
Read Also: The Dispute about Sugar subsidies at WTO
