NEW DELHI: Rising demand in the festive season and a poor prospects of sugarcane crop production due to a poor monsoon have prompted the government to continue curbs on the export of sugar until further orders. The government is worried about rising sugar prices in the election year. Though the sugar prices saw over 2 per cent rise compared to the previous year, the speculation over less production and high demand during the festive season could worsen the situation.
The government had put sugar under the ‘Restricted’ category on October 28, 2021 up to October 31, 2023. On Thursday, the government decided to continue this restriction to all variants of sugar, including raw, white, refined sugar, and organic sugar, until further orders.
Last year, the total production of sugar was 350 Lakh Metric Tonnes (LMT) while domestic consumption was around 280 lakh metric tonnes and 43 lakh metric tonnes sugar was diverted for ethanol production to blend with petrol. Moreover, on October 1, the opening stock of sugar was 57 lakh metric tonnes, which is less than the previous year.
“This time we will not allow the diversion of sugar, instead of maize, for ethanol production,” said Sanjeev Chopra, secretary, Department of Food and Public Distribution. Government officials said this would ensure healthy stocks of sugar in the country. It would further ensure sufficient sugar availability to Indian consumers at stable prices throughout the year.
The poor prospects of sugar in 2023-24 (October-September) is due to below-normal monsoon. The total deficit recorded by the Indian Meteorological Department (IMD) was nearly 6 per cent from the long-period average. It was the first time in the last five years that India received a deficit monsoon. Meanwhile, August was the driest in the recorded history of the IMD since 1901. It had a deficit of minus 36 per cent. The driest August has caused stress to India’s sugarcane crop.
“August’s deficit rain caused moisture stress on sugarcane crops of Maharashtra and Karnataka,” said Chopra. The scanty rain in Maharashtra and Karnataka may reduce the productivity and production of sugarcane. Maharashtra is the top sugarcane producer in the country followed by Uttar Pradesh.
Besides, the government’s efforts in the past few months to contain retail inflation of rice and wheat have not yielded results. The retail inflation in wheat is about 3.6 per cent in one year and that of rice increased to 11 per cent.
Maharashtra, which accounts for more than a third of India’s sugar output, could produce 9 million metric tonnes in the 2023-24 season, down from 10.5 million tonnes in 2022-23, according to the West Indian Sugar Mills Association. The state, which often surprises the global sugar market with wide swings in production, received 59 per cent lower rainfall than normal during August.