Export of sugar from India had increased following high prices of sugar in international markets. Thus, the government took this step to keep the sugar prices under control. This will also ensure sufficient availability of this staple food item in domestic markets. The import duty remains unchanged at 40%.
The Ministry of Agriculture has also suspended an earlier order for the compulsory sugar exports to the tune of 3.2 million tonnes. However, 1.5 million tonnes have already been shipped out of the country till now in this financial year.
In an attempt to ensure sufficient availability of sugar in India, it has also put a cap on the amount of sugar that traders can pile up. It stands at 500 tonnes across the states, except for Kolkata, to discourage hoardings.
In Delhi Spot Markets, the sugar prices have jumped to about 45%, to Rs. 3600 a quintal against Rs. 2490 a quintal at the same time last year. An increase of 50% has been witnessed in the global sugar prices in the last three months due to supply disruptions from Brazil. India is world’s second largest Sugar Producer after Brazil.
Back to Back two droughts in key sugarcane producing states such as Maharashtra and Karnataka may cut India’s sugar output in the next marketing year starting from October. According to the estimate by the Indian Sugar Mills Association, the country is likely to produce 25 million tonnes of sugar in financial year 2015-16, which is down by 11.7% from a year ago.
Indian sugar prices are still attractive in international markets while in Delhi market, sugar prices are hovering around the same levels since April 2016.
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