- Sugar prices have jumped nearly 40% in the past two months, prompting the government to import 1 million tonnes for the first time in nearly a decade.
- For three months from 1 September, sugar refineries in special economic zones near ports will be allowed to sell duty-free sugar in the domestic market.
- The government initially approved exports of 1.5 million tonnes this season, adding another 500,000 tonnes in February. Nearly 800,000 tonnes had been shipped before exports were halted in May.
- The last time India imported sugar for domestic consumption was nearly a decade ago, when the country was grappling with drought.
- The government has blamed lower sugarcane production linked to reduced rainfall during El Niño, hoarding, and tighter global supplies after adverse weather hit other major producers.
- Experts say another key factor was that India overestimated its own production and allowed sugar to be exported before the extent of the shortfall became clear.
India's sugar prices have surged nearly 40% in just two months, leading the government to import 1 million tonnes of sugar for the first time in nearly a decade.1
The price of sugar has escalated from around 40-45 rupees ($0.42-0.47; £0.31-0.35) per kilo in May-June to over 58-60 rupees in August, although there are signs of a slight easing in prices.
The government attributes this spike to lower sugarcane production caused by reduced rainfall during El Niño, alongside hoarding and tighter global supplies due to adverse weather affecting other major producers.5
However, experts argue that a significant factor was the government's overestimation of domestic production, which led to the approval of sugar exports before the shortfall was fully recognized.
Initially, the government sanctioned exports of 1.5 million tonnes for the season, later increasing this by another 500,000 tonnes in February. Nearly 800,000 tonnes had already been shipped before exports were halted in May.3
To mitigate the impact of rising prices, the government has allowed sugar refineries in special economic zones to sell duty-free sugar in the domestic market for three months starting September 1.
The last instance of sugar imports for domestic consumption occurred nearly a decade ago, during a period of drought.
“A kilo of sugar that cost 40-45 rupees in May-June now sells for over 58-60 rupees in several markets, though prices have begun to ease. The government initially approved 1.5 million tonnes of exports this season, but halted them in May after nearly 800,000 tonnes had shipped.”
BBC
