India on Wednesday lifted a slew of curbs on export of sugar and onion, food items that are considered “sensitive” because of their effects on household inflation, following a high-level meet chaired by Prime Minister Manmohan Singh.
The reserved price at which onions can be exported stands quashed, which frees up the commodity for unrestricted exports. Millers will now be also able to export sugar freely under the open general licence. “We will review it once sugar exports reach a particular level,” food minister KV Thomas told HT.
These include exporting grains held by the government, an open-market scheme and allocating 14.5 million tonnes of grains for the poor.
Food minister KV Thomas, agriculture minister Sharad Pawar, commerce minister Anand Sharma and finance minister Pranab Mukherjee participated in the brainstorm. Pawar has been criticising two ministries — food and commerce — for limiting exports of items such as sugar, cotton and milk, arguing that this hurt farm incomes in a season of high international prices. Thomas, however, had so far advocated a more cautious export policy to avoid stoking food prices, as retail inflation touched 9.5% in March.
Sugar export is tricky. Allowing too much export could stoke domestic prices. On the other hand, millers rely on export of surplus stocks to keep businesses profitable and pay cane farmers. Payment arrears — currently Rs 8,000 crore — typically cause farmers to shift from cane to other crops, resulting in a vicious alternating cycle of shortage and glut every four years or so.