After rice, is India looking at banning sugar exports?

For sweet lovers across the world, there could be some bitter news. After India banned the export of rice, there are rising fears that sugar could be the next staple to face an export ban. Interestingly, this isn’t the first time that such news has surfaced. Earlier in April too, reports had emerged that India would be banning the export of the sweetener. The fears of a sugar export ban come at a time when the country’s food inflation has risen to 4.49 per cent in June, against a revised 2.96 per cent in May. We take a closer look at what’s happening and what an impending export ban on sugar could mean for the world. A sugar ban on the horizon? On 20 July, India announced that it would stop exporting non-basmati white rice , effective immediately. The move was designed to help lower rice prices and secure availability in India, according to the government’s statement. Exports of parboiled rice, which has been partially boiled; and basmati rice, are still allowed. The news threw the world into a tizzy – after all, India is responsible for about 40 per cent of the global rice trade and the banned items amount to about 15 per cent. Shortly after the government’s announcement, there was panic in the international markets and at one time, NRIs in America began panic-buying the staple . And on Saturday, the United Nations Food and Agriculture Organization (FAO) reported that the rice price index has risen 2.8 per cent in July from a month ago to their highest level in nearly 12 years. The FAO also warned that this upward pressure of rice prices “raises substantial food security concerns for a large swathe of the world population, especially those that are most poor and who dedicate a larger share of their incomes to purchase food.” [caption id=“attachment_12968352” align=“alignnone” width=“640”] A worker spreads sugar inside a sugar factory at Sanyan village in Gujarat. Uneven rainfall has affected the production of sugar in the country. File image/AFP[/caption] Now, on Monday (7 August), Bloomberg reported that India is considering a ban on sugar exports too, as uneven rainfall has affected production. Speaking on the same, Henrique Akamine, head of sugar and ethanol at Tropical Research Services, told Bloomberg, “The rice export ban is a clear signal the government is concerned about food security and inflation. The worry now is that the government will probably follow suit and do something similar regarding sugar.” Additionally, India is now using more sugar for biofuel. A whopping 4.5 million tonnes is being diverted to make ethanol, a 9.8 per cent rise from the year before, owing to which India may not want to export its staple. Lower sugar production in India? The possible ban on sugar exports is primarily owing to lesser production, as per the Indian Sugar Mills Association (ISMA). Aditya Jhunjhunwala, the president of ISMA, stated that sugar cane fields in the main producing regions of Maharashtra and Karnataka didn’t get adequate rain in June, leading to crop stress. The group expects sugar output to drop 3.4 per cent from a year ago to 31.7 million tonnes in 2023-24, reported Bloomberg. Bharat Sankpal, a farmer from the Satara district, also said that less rainfall had contributed to a dip in sugar production.“Sugarcane thrives on the abundant rainfall experienced from June to September, but this year’s growth has nearly stalled due to poor rainfall,” he was quoted as telling news agency Reuters. Maharashtra, which is a key cane-growing district, received up to 71 per cent less-than-normal rainfall so far. Similarly, in Karnataka – the third-biggest sugar producer in India – has seen a rainfall deficit as high as 55 per cent in cane-growing districts. [caption id=“attachment_12968372” align=“alignnone” width=“640”] Vendors load sugarcane onto a vehicle at a wholesale market in Kolkata. Sugar output is expected to 3.4 per cent from a year ago to 31.7 million tonnes in 2023-24. File image/Reuters[/caption] Earlier in April, Jhunjhunwala had said that Maharashtra produced only 10.5 million tonnes of sugar, as against 13.7 million tonnes a year ago. Uttar Pradesh’s sugar can output had also fallen – 10 million tonnes, as compared to 10.2 million tonnes. Even Karnataka reported a drop from 6.2 million tonnes to five million tonnes. However, despite the fall in output, the Centre recently put out a statement, quelling fears that there was shortage of sugar for domestic use. The administration in a statement said that there is a sufficient availability of sugar in India and the retail prices are stable despite record increases in international prices. Is this the first time? This isn’t the first time that India is considering a ban on sugar exports. Last June, the government had “ restricted” the export of sugar – a first in four years. At the time, the government moved the export of sugar from the ‘open category’, which requires no government intervention, to ‘restricted’ category. This meant that export of sugar was allowed only with specific permission from the Directorate of Sugar, Department of Food and Public Distribution (DFPD), Ministry of Consumer Affairs, Food & Public Distribution. The curbs came into effect on 1 June 2022 and it was stated that it would continue until 31 October 2023. At the time, the curbs had come in owing to a worry over low stocks of the staple. [caption id=“attachment_12968432” align=“alignnone” width=“640”] India has had a sweet sugar export story until now. In 2017-2018, India exported a total of 6.2 lakh tonnes. In 2021-2022, this number rose to a whopping 110 lakh tonnes. File image/PTI[/caption] What could be the impact of a ban? If India does enforce a ban on sugar, it could further imperil food security across the world. This is because India today is the world’s biggest producer of sugar and the second largest exporter behind Brazil. A look at the numbers, say it all. In 2017-2018, India exported a total of 6.2 lakh tonnes. In 2021-2022, this number rose to a whopping 110 lakh tonnes. Similarly, the nation earned $810.9 million in 2017-2018. However, in 2021-2022, this skyrocketed to $4.6 billion. Food security has now become a major worry, with the UN publishing a report that over 122 million more people are facing hunger in the world since 2019 due to the pandemic and repeated weather shocks and conflicts, including the war in Ukraine . The report added that approximately 29.6 per cent of the global population, equivalent to 2.4 billion people, did not have constant access to food, as measured by the prevalence of moderate or severe food insecurity. India hasn’t made a final decision on sugar exports, but food experts hope that the country doesn’t impose a ban on the staple. With inputs from agencies