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Sugar export curbs and their impact:

GS Paper 3:

Syllabus: Issues related to direct and indirect farm subsidies and minimum support prices; Public Distribution System objectives, functioning, limitations, revamping; issues of buffer stocks and food security.

 

Context:

The government has notified that sugar exports will be restricted, or allowed only with permission.

  • The curbs come into effect from June 1 and will continue till October 31, or until further orders.

 

What are the latest changes?

  • Restricted Category: Sugar has moved from the ‘open category’, which requires no government intervention, to ‘restricted’ category.
  • Specific permission: Export of sugar is allowed only with specific permission from the Directorate of Sugar, Department of Food and Public Distribution (DFPD), Ministry of Consumer Affairs, Food & Public Distribution.
  • Re-exports of refined sugar, made from raw sugar imported under the Advance Authorisation Scheme, may not require prior permission.

 

Current Affairs

 

Why the curbs?

  1. To maintain “domestic availability and price stability of sugar”.
  2. Exports, if allowed, can lead to supply constraints for around three months in the next season.
  3. If there is scarcity of back-up stocks during this period then prices can escalate in the domestic market.
  4. To Curb inflation: India’s retail inflation has been above RBI’s tolerance band for the fourth straight month in April, and is likely to continue in the coming months too.

 

Current Affairs

 

Impacts:

  • Curbs on exports may further flame global food prices.
  • The export restrictions will make more surplus sweetener (sugar) accessible for domestic ethanol production, which is a primary government aim as per National Biofuel Policy.

 

Sugar- production, imports and exports:

India is the biggest producer of sugar and the second largest exporter after Brazil.

 

Current Affairs

 

Insta Curious:

Did you know about the Agriculture Infrastructure Development Cess?

  • It will be used for a specified purpose i.e. to improve agricultural infrastructure in India firstly by enhancing production, secondly by protecting this sector from undue competition and thirdly by enhancing its output competently.

Know more about it. Reference: read this.

 

InstaLinks:

Prelims Link:

  1. What is Minimum Selling Price?
  2. How is it set?
  3. Differences between Minimum Support Price and Minimum Selling Price.
  4. What is FRP?

Mains Link:

Discuss the significance of Minimum Selling Price (MSP) for sugar.

 

Q.3) Consider the following statements:

  1. India is the biggest producer of sugar.
  2. India is the second largest exporter after Brazil.

Which of the above statements is/are correct?

  1. 1 only.
  2. 2 only.
  3. Both.
  4. None. 

Sources: Indian Express.