India First: Government’s strategic measures to ensure stable sugar supply and economic benefits

The Government of India has demonstrated strategic foresight by implementing timely measures to ensure an abundant supply of sugar at reasonable prices throughout the country for the entire year. As the current Sugar Season (October to September) 2022-23 draws to a close on September 30, 2023, India has achieved a remarkable sugar production of 330 Lakh Metric Tonnes (LMT), excluding the diversion of about 43 LMT for ethanol production. This accomplishment marks the second-highest sugar production in the last five sugar seasons, showcasing the nation’s resilience in agriculture.

India first strategy

To prioritize the well-being of its citizens and ensure timely clearance of dues to farmers, India has thoughtfully limited its sugar export quota to approximately 61 LMT. This prudent decision has resulted in an optimal sugar stockpile of approximately 83 LMT at the end of August 2023. Such a substantial reserve is more than sufficient to meet approximately three and a half months of consumption, reassuring domestic consumers that sugar will remain accessible at reasonable prices in the foreseeable future.

Moreover, the Indian Meteorological Department (IMD) has forecasted normal monsoon patterns for September 2023. This is a promising development for sugarcane cultivation, particularly in regions such as Maharashtra and Karnataka, where improved rainfall prospects bode well for better crops and recovery in the upcoming Sugar Season 2023-24.

The Government of India has consistently prioritized the availability of sugar for domestic consumption and the diversion of sugarcane for ethanol production, while also ensuring an adequate closing balance at the end of each sugar season. This prudent approach dictates that only surplus sugar, if available, is permitted for export, thus preserving price stability in the domestic market. This noteworthy policy ensures that Indian consumers enjoy sugar at some of the world’s most competitive prices, all without government subsidies to sugar mills.

Tracking sugar stock

In addition to these measures, the Government of India has taken proactive steps to collect information pertaining to traders from various sugar mills. This endeavour aims to establish a robust monitoring mechanism to track sugar stock levels across the nation. Industry associations have echoed their satisfaction with the abundance of sugar stocks and commended the achievement of an optimal closing sugar balance at the end of the season.

This fruitful collaboration between the government and the industry has yielded tangible benefits, with over Rs 1.07 crore (equivalent to 94% of the current season’s cane dues) already disbursed by mills. This progress has instilled confidence and enthusiasm among farmers within the Sugar Sector.

In conclusion, the Government of India’s proactive measures and prudent policies aimed at ensuring a stable supply of sugar at reasonable prices for domestic consumers yield several positive outcomes. These include price stability, bolstering food security, supporting ethanol production for energy security, and enhancing the welfare of farmers and the rural economy. Such strategic initiatives reflect the government’s commitment to the well-being of its citizens and the prosperity of its agriculture sector.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.