During past few years, sugar production in the country has been consistently more than the domestic consumption thereby creating surplus situation. With a view to address the problem of surplus sugar in the country, the Central Government has been encouraging sugar mills during the last few sugar seasons to divert surplus sugar to ethanol and is also facilitating mills to export surplus sugar thereby improving liquidity of sugar mills enabling them to clear cane price dues of farmers.
Export of sugar and diversion of sugar to ethanol during the recent times has also helped in maintaining demand-supply balance and stabilizing domestic sugar prices.
Details of sugar export and diversion of sugar to ethanol since sugar season 2018-19 (October-September) are as under:
In view of the macro scenario going across the globe, any uncontrolled export from India beyond the comfortable limit could have created scarcity; and local prices could spike during the period of September- November, 2022. The government is also concerned about food inflation.
Therefore, with a view to ensure sufficient availability of sugar for domestic consumption within the country at reasonable price, Government in May, 2022 has imposed restrictions on export of sugar beyond 100 LMT; and exporters as well as sugar mills were issued Export Release Orders (EROs) upto 10 LMT for export in June, 2022. As on 01.08.2022, about 100 LMT has been exported.
However, there have been changes in the stock position of sugar since the time of imposition of restrictions in May, 2022, like increase in sugar production and decrease in sugar consumption due to weak demand of sugar in domestic market. Crushing of sugarcane generally commence by end of October or 1st week of November; however, in the ensuing sugar season 2022-23 due to sufficient availability of sugarcane, crushing of cane is likely to commence in 1st to 3rd week of Oct, 2022; and new sugar would start coming in the market from mid of October, 2022. Thus, opening stocks of 60 LMT in the ensuing sugar season would be sufficient to keep the domestic prices under control.
Therefore, the position was reviewed by the Government in last week of July, 2022 and it has been decided to allow export of sugar upto 112 LMT in the interest of sugarcane farmers and sugar industry.
Even after export of sugar upto 112 LMT, closing stock of 60 LMT would be maintained & as crushing in Maharashtra, Karnataka and other states would commence from 1st to 3rd week of October, 2022; there would be sufficient availability of sugar in the country at reasonable price & retail price would likely to remain stable.
Export of sugar of 100 LMT till 1.08.2022 in the current sugar season has helped in improving liquidity of sugar mills by Rs. 33,000 Crore enabling them to clear cane price dues of farmers.
Further export of sugar of 12 LMT would help in improving liquidity of sugar mills by Rs. 3600 Crore enabling them to clear cane price dues of farmers which stood around Rs. 9700 Crore as on 04.08.2022.
Export of sugar to this extent would also help in earning foreign exchange and would help in reducing trade deficit.
