India reserve sugar stocks, double down on subsidies?
India’s government may not just maintain current export subsidies but expand them to cover other shipping and marketing costs, according to off-record sources. The main impetus for the move, of course, is the desire to reduce domestic sugar stocks and support sugar pricing, the goal behind the announcement of a 4 MMT buffer stocks—at a cost of Rs 16.7 billion or more than US$240.1 million. (Bloomberg reports the stocks target at 5 MMT.) The Modi government is presumably taking this step because it was satisfied with the effectiveness of an announced reserve stock of 3 MMT a year ago.
Brazil, Australia, and Guatemala had already been pushing back against India’s sugar export subsidies before the WTO. These three sugar exports pushed for a WTO dispute panel in a recent meeting, an effort that was procedurally blocked by India’s representatives, who argued for further negotiations. Per the Hindu Business Line, India could not block the request to set up a WTO dispute panel in the next meeting of the Dispute Settlement Body on Aug. 15.
India wholesale sugar pricing history
Source: Ministry of Consumer Affairs
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