Centre’s decision to limit export will not impact Maha’s sugar economy much

The state has so far produced 146 lakh million tonne (LMT) of sugar, which is an all-time high and 25% higher than the previous year
The centre’s decision to limit the export of sugar may not impact Maharashtra’s sugar economy much even as the state has registered record production this year and sugar mills are still working to crush the remaining sugarcane (HT FILE PHOTO)
The centre’s decision to limit the export of sugar may not impact Maharashtra’s sugar economy much even as the state has registered record production this year and sugar mills are still working to crush the remaining sugarcane (HT FILE PHOTO)
Published on May 25, 2022 09:18 PM IST
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ByAbhay Khairnar

PUNE The centre’s decision to limit the export of sugar may not impact Maharashtra’s sugar economy much even as the state has registered record production this year and sugar mills are still working to crush the remaining sugarcane, experts said. According to the Maharashtra sugar commissionerate, the state has so far produced 146 lakh million tonne (LMT) of sugar, which is an all-time high and 25% higher than the previous year. This has made Maharashtra the largest sugar producer, ahead of Uttar Pradesh (UP).

Those from the sugar trade said that the centre’s decision to regulate the export of sugar will not affect much the sugar industry and farmers but will offer relief from inflation to consumers. If the decision to cap the export of sugar would not have been taken, the domestic price of sugar would have shot up. The central government has decided to allow the export of sugar up to 100 MLT with a view to maintain domestic availability and price stability of sugar.

Prakash Naiknavare, managing director of the National Cooperative Federation of Sugar Mills, said, “The decision taken by the centre was expected. Earlier in 2016, the government took such steps. If the government would not have taken the decision to regularise sugar export, sugar prices would have definitely increased in the domestic market which in turn would have increased inflation.”

According to Naiknavare, with the government moving to regularise the export of sugar, sugar prices at the factory level have dropped by Rs50 per quintal which is normal. Within the next few days, the prices will recover. “If the traders get a good price in the domestic market, they too will prefer to sell in the local market. The new crushing season will start soon. The central government will rethink its policy after the new season,” he said.

According to officials from the union ministry of consumer affairs, food and public distribution, the centre’s decision will ensure that the closing stock of sugar at the end of the sugar season (September 30, 2022) remains 60 to 65 LMT, which is two to three months’ stock, the monthly domestic requirement of sugar being around 24 LMT. “Crushing in the new season starts in the last week of October in Karnataka, and between the last week of October and November in Maharashtra, and in November in Uttar Pradesh. So generally up to November, the supply of sugar takes place from the previous year’s stock,” stated the release issued by the ministry.

In the current sugar season 2021-22, contracts for export of about 90 LMT have been signed; about 82 LMT sugar has been dispatched from the sugar mills for export; and approximately 78 LMT of sugar has been exported. Export of sugar in the current sugar season 2021-22 is historically the highest, according to the ministry of consumer affairs, food and public distribution. In the sugar seasons of 2017-18, 2018-19 and 2019-20, only about 6.2 LMT, 38 LMT and 59.60 LMT of sugar, respectively, were exported. In the sugar season of 2020-21, about 70 LMT of sugar has been exported. In the domestic market, monthly requirement of sugar is 24 LMT. The government is planning to maintain a stock of 60 to 65 LMT for the next two to three months to maintain sugar prices as the crushing season nears an end.

Maharashtra sugar commissioner Shekhar Gaikwad said, “The decision will not affect prices much. Already, whatever sugar contracts were signed for exports have been executed. Those which are in transit will apply for permission. It will definitely help regulate the domestic sugar prices.”

Currently, the wholesale price of sugar in India is ranging between 3,150 to 3,500 per quintal while retail prices are also within control in the range of 36 to 44 in different parts of the country. “It’s the first time India has shown its dominance in the world sugar market by overtaking Brazil in production. But in future, we will also need to shift focus towards biofuel,” Gaikwad said. The centre’s decision has been taken in light of the record sugar export this year.

However, former member of parliament (MP) and farmer-leader Raju Shetti criticised the central government over its decision and said, “For the first time, India got a chance to dominate the international market in terms of sugar export. India cemented its image as a sugar exporter as there is drought in Brazil. If Brazil gets good production, they will again takeover this market. There was no demand from any section to regularise the export of sugar. The prices of wheat and oil are increasing but sugar prices are constant. But the central government took this decision all of a sudden which will affect farmers too. The central government took this decision in the wake of inflation and to avoid criticism but it will definitely impact the sugar industry and farmers. The government’s data itself predicts that there will be a bumper sugarcane crop next season then why is the government so worried about it?”

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