Government bans export of sugar
The government has taken a strict step to ensure that your kitchen budget does not get spoiled amid rising inflation. The Government of India has completely banned the export of sugar from the country with immediate effect. This ban will remain in force till 30 September 2026 or until further orders. This decision has been taken at a time when the prices of food items remain a very sensitive issue in the country. This big decision directly means that the sweetness of sugar will not be heavy on your pocket in the coming festive season and months.
How will the fire of inflation stop in the domestic market?
The government’s strategy behind this ban is very clear. at any cost Sugar prices within the country Don’t want to let it go out of control. Actually, due to El Nino there is uncertainty regarding monsoon. There is a possibility of decline in sugarcane production in major producing states, due to which production may be less than consumption for the second consecutive season. In such a situation, maintaining supply in the domestic market is the first priority for the government. Apart from this, it is also necessary to save sugar stock to meet the target of blending up to 20 percent ethanol in petrol. Due to stoppage of exports, the country will be left with sufficient stock, which will ensure smooth production of ethanol and will also put a strong check on food inflation.
Bad condition of Chinese companies in stock market
As soon as the news of putting exports in the ‘Restricted’ category came in the market, huge selling was seen in the shares of Chinese companies in the stock market. On Thursday, shares of big companies like Dhampur Sugar Mills and Dwarikesh Sugar Industries fell by about 7 percent. Shares of Uttam Sugar Mills and Bajaj Hindustan Sugar also caused huge losses to investors. However, while on one hand the sugar sector appeared to be under pressure, the mood of the entire stock market remained positive. During this period, BSE Sensex rose by 522.64 points, while NSE Nifty also recorded a spectacular rise of 95.65 points.
Huge supply crisis will deepen in foreign markets
India is the second largest sugar producing country in the world. In such a situation, the stoppage of supply from here is sure to have a direct impact on the global market. Asian and African countries like Sudan, Libya, Sri Lanka, Bangladesh are heavily dependent on Indian sugar for their needs. Now these countries will be forced to turn to Brazil or Thailand. As a result, there is a possibility of a sharp rise in the prices of raw and white (refined) sugar in the international market. The Iran-related conflict in the Middle East and rising energy costs are already putting pressure on global shipping routes, further increasing the difficulties for these importing countries.
A big effort to handle the economy
This decision taken on sugar is part of a larger strategy to protect the economy from external shocks. The financial situation is currently under pressure as the Indian Rupee has reached a record low of 95.75 against the Dollar. To save foreign exchange, the government has increased the import duty on gold and silver from 6 percent to 15 percent, just a day before the Chinese export ban. Seeing the seriousness of the situation, Prime Minister Narendra Modi himself has made a special appeal to the common citizens not to buy gold for a year until the external financial situation of the country becomes stable.
However, amidst this restriction, the government has given big relief to those shipments which have been custom cleared or which have been loaded at the ports. Apart from this, this restriction will not be applicable on exports under fixed quota to America and European Union (EU).
Also read- Government’s strict action to control sugar prices, complete ban on export till September
