INDIA: Food ministry mulling curbing sugar exports
Published: 07/30/2012, 5:24:59 PM
Amid rising prices of sugar in the retail market, the Food Ministry is considering various options to check exports that include quantitative restriction and duty on outbound shipments, according to India's Moneycontrol.
Sugar prices have risen by INR3 (US$0.05)/kg in the retail market here and is ruling at INR37-38 level on concern that deficient rains might affect sugarcane crop.
In May, sugar exports were freed and put under the Open General License (OGL). Before that, the government had allowed two million tonnes of exports in the 2011/12 marketing year (October-September).
"Sugar prices have risen recently. The ministry is thinking on options like putting a cap on exports at 3.5 million tonnes for this season, imposing export duty and abolishing import duty," a source said. Currently, there is 10% duty on sugar import.
The ministry does not want prices to rise further ahead of festival season, they added. The ministry had recently made an extra allocation of nearly 300,000 tonnes for sale in the open market during this quarter to check rising prices.
Sugar production of India, the world's second-largest producer, is estimated at 26 million tonnes in 2011/12 against 22 million tonnes of annual domestic demand.
The output is estimated to decline to 25 million tonnes in the next marketing year starting October 2012.