India is the world’s largest consumer of sugar – no surprise, in a nation of over 1 billion residents with a notorious sweet tooth. It’s alternately been a net exporter and a net importer of sugar over the past few years, as crops – which depend on the monsoon – have good and bad years.
Kingsman SA, a major sugar broker, says that this year’s surplus may allow the government to free up some of the politically-minded constraints and regulations it has imposed on the sugar industry in recent years.
“This will give the Indian government a window of opportunity to remove some of the constraints on the sugar industry and, in the process, even out the production cycle,” John Kingsman, the managing director of the eponymous firm, told Bloomberg News.
Under the current system, the government supports growers by setting a minimum price for sugarcane, defining the amount of sugar that’s sold each month. It also buys 20 percent of the total production for discounted sales to India’s massive poor population.
India, according to its own Sugar Mills Association, has an outsize effect on the global markets, driving surpluses and deficits in sugar supply around the world. Transitioning to a more liquid, market-based structure could smooth out some of the shifts.
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