The Central Government has partially relaxed the ban imposed on sugar exports in the 2024-25 season, allowing the export of 1 million tonnes of sugar.
Objective of sugar export decision
- Ensuring price stability: To keep sugar prices balanced in the domestic market.
- Benefits to farmers and workers: To improve the income of sugarcane farmers and workers working in the sugar industry.
- Increasing cash flow for sugar mills: To strengthen the financial position of the mills by disposing of excess stock.
Key Points
Export quota allocation
- The government has allocated an export quota of 1 million tonnes (MT) of sugar.
- This quota has been distributed among 518 sugar mills that have operated in at least one season in the last three sugar seasons (2021-22, 2022-23, and 2023-24).
- Each sugar mill has been equally allocated 3.174% of their average production of the previous three years.
2022-23 Sugar Export Record
- India had exported 6 million tonnes of sugar in the 2022-23 season.
- After this, the government had not allocated any export quota till now.
Government Objective
- Allowing sugar exports will help improve the sugar balance of the country.
- It will improve the financial condition of sugar mills and ensure timely payment to sugarcane farmers.
Decision on Sugar Export
State-wise Production Estimates
- Maharashtra, Karnataka, and Uttar Pradesh together contribute to more than 80% of the country’s total sugar production. Due to the fall in sugarcane yield in these states, traders have reduced the production estimate for the current season of 2024-25.
- Production may fall to 27 million tonnes from 32 million tonnes last year, well below the annual consumption of 29 million tonnes.
India’s export markets
- India’s sugar export markets include Indonesia, Bangladesh and the United Arab Emirates. In the five years leading up to 2022-23, India was the world’s second-largest exporter, with an average of 6.8 million tonnes of sugar exported.
- India did not allow exports in the 2023-24 marketing year.
Benefits
- Price stability: The decision aims to stabilise domestic sugar prices, preventing a fall in prices due to higher production.
- Support to farmers: By enabling exports, sugar mills will get better liquidity, ensuring timely payments to the five crore farmer families engaged in sugar production.
- Boost to sugar mills: Export permission will help sugar mills clear surplus stocks, improving their cash flows and strengthening their financial position.
- Increase in employment: The move is expected to benefit around five lakh workers in the sugar industry, which will contribute to job security.
- Strengthening India’s sugar sector: The decision will strengthen the sugar sector, improving overall market stability and boosting its growth prospects.