- After a ban on wheat exports, India is now planning to ban sugar exports, according to media reports.
- This triggered a plunge in sugar companies’ stocks as exports have been a lucrative source for these companies.
- Earlier, the government had announced financial and other assistance to sugar farmers, mills and distilleries.
A Reuters report states that the government could set an export limit at 10 million tonnes, which is slightly above the export contracts of 9 million tonnes already signed for the current season.
India is the world’s largest manufacturer of sugar, and the second largest exporter after Brazil.
It is worth noting that the Indian government recently announced measures to support sugar farmers and mills financially. It increased the ‘fair & remunerative price’ (FRP), and provided interest subsidies to the tune of 50% to sugar mills and distilleries.
Reacting to the reports, stocks of almost all sugar companies, including major ones like Shree Renuka, Balrampur Chini, Dalmia Sugar, among others, plunged by nearly 8%.
Source: NSE
In the current sugar season, the government underlined that export contracts amounting to 9 million tonnes have been signed, and 7 million tonnes has been physically exported already.
Hence, experts suggest that these sugar export curbs may not be that much of a problem.
“Firstly, as of today only about 7.2 million tons of sugar has been exported and once the rainy season sets in the exports will any case come down and 10 million tons is still a far way off,” Atul Chaturvedi, executive chairman of Shree Renuka Sugars told Economic Times.
Countries are rushing to protect their stocks of food grains as the Russia-Ukraine war refuses to simmer down. While Russia and Ukraine are both major exporters of food grains, countries like India, which are self-sufficient in items like wheat, rice and others, also bore the brunt of rising food prices.
Across the world, 43 countries have placed protective measures to ensure they have adequate stocks of wheat. India went so far as to call out the West, saying that food grains should not face the same fate as Covid-19 vaccines.
“A number of low-income societies are today confronted with the twin challenges of rising costs and difficulty in access to food grains. Even those like India, who have adequate stocks, have seen an unjustified increase in food prices,” said Minister of State for External Affairs V Muraleedharan in the UN on May 18.
“It is clear that hoarding and speculation is at work. We cannot allow this to pass unchallenged,” he further added.
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