How India’s suspension of sugar exports will affect import-reliant Arab countries

Special How India’s suspension of sugar exports will affect import-reliant Arab countries
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Reduced sugar production in India will undoubtedly cause price increases in the world market. (Shutterstock photo)
Special How India’s suspension of sugar exports will affect import-reliant Arab countries
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An Indian worker prepares sugarcane to be sent to a nearby sugar mill in Modinagar, Ghaziabad, India. (AFP/File photo)
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Updated 01 September 2023
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How India’s suspension of sugar exports will affect import-reliant Arab countries

How India’s suspension of sugar exports will affect import-reliant Arab countries
  • As major importers of Indian sugar, Arab countries are braced for further food price inflation
  • The ban follows similar controls on rice and onions, both staples of the Arab dinner table

RIYADH/DUBAI/NEW DELHI: Arab countries are braced for a sharp rise in the price of all things sweet after it emerged this week that India, a major supplier of agricultural products to import-reliant Middle East, plans to suspend sugar exports from this October until September next year.

According to three Indian government sources who spoke to Reuters news agency, New Delhi imposed the 11-month ban — the first of its kind in seven years — mainly due to reduced cane yields caused by a lack of rain over the summer monsoon season.




A tractor operator prepares a sugarcane field for planting in Muzaffarnagar, Uttar Pradesh, India. Lack of rainfall in some parts of the country has prompted the government to suspend exportation of sugar. (Shutterstock)

“This potential ban stems from inadequate rainfall in critical sugarcane cultivating districts,” Pushan Sharma, director of research at CRISIL Market Intelligence and Analytics, told Arab News.

Although rainfall distribution in the sugarcane-growing states of Uttar Pradesh, Maharashtra, and Karnataka was normal this summer, Sharma says “a few key districts have received lesser rainfall, and the yields are expected to be lower” in the 2023-24 sugar season.

The fall in production is a major concern for the sugar industry as these states alone account for more than half of India’s total sugar output.

Reduced production in India and the country’s absence from the world market will undoubtedly cause price increases at a time when sugar was already trading at multi-year highs.

There are now renewed fears of further inflation in global food markets, particularly in the Arab world, which buys much of its sugar from India.

“There are some Arab countries that will not be able to absorb the price increase shock, and this will affect its imports, its stock, and the distribution process,” Fadel El-Zubi, a lead consultant for the UN Food and Agriculture Organization in Jordan, told Arab News.

“These Arab countries will witness further inflation, at a time when their local currencies are already weak.” Therefore, these countries need to take proactive measures ahead of anticipated disruptions in the food market, he said.




The prices of sweets and other sugary food products could rise in the Arab world, which buys much of its sugar from India. (Shutterstock)

Arab countries will not weather future price fluctuations “unless they start implementing the right food system and gradually increase self-sufficiency.”

While these countries do not necessarily need to achieve total self-sufficiency, El-Zubi added, they do need to increase the current level of production and depend less on importing food items.

El-Zubi predicts “some consumption behavior” will change as a result of the sugar export suspension, but such a change “can’t happen overnight.”


FASTFACTS

India to suspend sugar exports from October 2023 to September 2024.

Middle East countries are major importers of Indian sugar.

Move is expected to increase food inflation in the Arab world.


The rise in crude oil prices in recent years, which invariably impacted the cost of freight, had made India a popular choice for Middle Eastern sugar importers, given its relative proximity compared to other major sugar producers like far-flung Brazil.

Nevertheless, Arab countries, mainly in North Africa, imported approximately 10 percent of Brazil’s sugar exports in the first quarter of 2023.

Last year, Qatar imported 90 percent of its sugar from India, the UAE 43 percent, Bahrain 34 percent, and Saudi Arabia and Kuwait 28 percent each, according to figures from the International Trade Center.

Sugar is a staple ingredient in Gulf Cooperation Council countries, making them especially susceptible to price rises as a result of the export suspension.

“Since all GCC countries have significant dependency on Indian sugar, an export ban in India would lead to lower supplies in the global market, making imports more expensive for all sugar-importing countries,” said Sharma.




An Egyptian man shows a bag of sugar he just bought from a truck in the capital Cairo on October 26, 2016, as the country suffered from a sugar shortage. With India's move to suspend the exportation of sugar, some countries in the Middle East are expected to be hit badly with inflated sugar prices. (AFP/File)

And these countries will not find it easy to find new or substitute sources for their sugar in the meantime.

“While these sets of restrictions will force the Arab world to diversify their supply sources, it will take time to change suppliers,” Anupam Manur, an assistant professor at the Bangalore-based Takshashila Institution, told Arab News.

“In the short-run, higher food inflation will be seen.”




Coffee lovers in the Middle East may have to do with less sugar to cushion themselves from the impact of Inda's sugar export ban. (AFP)

Despite these predictable ramifications, the Indian government has concluded the ban was a necessary step.

“Domestic considerations come into play in the ban. The government is looking at the domestic consumers’ interest,” Gokul Patnaik, chairman of Global AgriSystem Pvt. Ltd. and former director of the Agricultural and Processed Food Products Export Development Authority, told Arab News.

“Farmers and growers can make some money through increased prices. In the case of onions, the growers are affected directly. In the case of sugar (a processed product), it’s an indirect effect. But it harms the growers in all cases.”

For Manur, a pattern is emerging in India’s agricultural trade policy. New Delhi’s “successive restrictions on export” clearly indicate it seeks to “prioritize domestic supply requirements” over export earnings, he said.




Workers harvesting sugarcane in Maharashtra, India. (Shutterstock photo)

Overall retail inflation in India was also a recent concern, with the consumer price index jumping to a 15-month high of 7.44 percent in July and food inflation to 11.5 percent, its highest in over three years.

“However, inflation is as much a result of demand-supply mismatches as it is with consumer expectations,” said Manur.

“Ironically, by undertaking this series of restrictions on exports, it is sending a signal of scarcity, and that can drive up prices by itself. It also diminishes incentives at the margin for increased production.”

India has proven to be one of the fastest-growing sugar exporters in recent years. Last year, it was the second-largest exporter of the commodity worldwide, selling $5.7 billion worth, up from a comparatively paltry $810.9 million in 2017.

New Delhi’s increased sugar exports can be attributed to a number of factors ranging from favorable weather conditions to rising domestic sugar production and government policies supporting sugar exports.




Indian workers loading sugarcane at the Triveni sugar refining factory in Sabitgarh village, in Bulandshahr district of Uttar Pradesh state. (AFP/File)

“India holds the position of the second-largest sugar exporter globally after Brazil, contributing to 15 percent of global exports,” said Sharma. 

“However, for the October 2022 to September 2023 sugar season, the export share is expected to decline to 11 percent due to a significant drop in exports.”

Sugar is not the only Indian food export that has proven unreliable in recent months.

The country surprised foreign consumers last month by imposing a ban on non-basmati white rice exports. It also set a 40 percent duty on onion exports in an attempt to stabilize food prices ahead of state elections later this year.




Indian workers pack processed sugar at the Triveni sugar refining factory in Sabitgarh village, in Bulandshahr, Uttar Pradesh. New Delhi's decision to suspend the exportation of rice, sugar and other staples could backfire, with India eventually losing its share of the market in the Middle East, critics warn. (AFP/File)

“This kind of knee-jerk reaction of banning the export is not good for our well-being as a long-term exporter,” said Patnaik. “At best, there can be adjustments in export taxes, but the total ban should not be done.

“If you ban, you lose credibility as a long-term supplier. The ban will no doubt affect the Arab world. But it will also affect India’s credibility.”

Manur concurred with this assessment. “India might experience strained trading relations with its trading partners and could result in either retaliatory tariffs or the loss of negotiating power in future trade talks,” he said.

“Further, this can hurt India in the long run as many countries would scramble to diversify their food suppliers.”

In the short term, it could negatively impact poorer countries in the Arab world, where food security is already a concern, especially since the onset of the Russia-Ukraine war, which threatens to imperil grain exports to major importers.

While major sugar-importing countries like the UAE have sufficient financial cushioning to deal with increased food prices, developing nations in the region do not.

 

 


In Tehran, fears grow of potential Iran-Israel war

In Tehran, fears grow of potential Iran-Israel war
Updated 13 April 2024
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In Tehran, fears grow of potential Iran-Israel war

In Tehran, fears grow of potential Iran-Israel war
  • Like most Iranians, Maryam has been following the news about a stand-off between Iran and Israel since a strike hit Iran’s consulate in Damascus on April 1
  • The attack, which Tehran has blamed on Israel, killed seven members of Iran’s Revolutionary Guards Corps, including two generals

TEHRAN: After three days off, people in Tehran returned to work as normal on Saturday, but with a lingering cloud of concern that soaring tensions between Iran and its arch foe Israel could tip over into war.
“I don’t know who is at fault and who is not, but it is better to reach a compromise so that the war does not begin, and innocent people don’t die,” said Maryam, a 43-year-old private sector worker.
Like most Iranians, Maryam has been following the news about a stand-off between Iran and Israel since a strike hit Iran’s consulate in Damascus on April 1.
The attack, which Tehran has blamed on Israel, killed seven members of Iran’s Revolutionary Guards Corps, including two generals.
Iran has since vowed to punish Israel for the attack, without specifying how.
The United States and other nations have urged restraint.
Ties frayed further on Saturday, when Iran seized an Israeli-linked ship in the Gulf.
Israel then issued a warning that Iran would “bear the consequences for choosing to escalate the situation any further.”
The Iranian reformist newspaper Shargh said on Saturday that “the longer Tehran’s response is delayed, the more it has negative consequences on the country’s economy and intensifies concerns in society.”
This uncertainty has weighed on the return to school for students after the long holidays that follow the Iranian New Year, celebrated on March 31 — as well as the end of Ramadan.
“God willing, our government will favor reason over emotion,” said Salehi, a 75-year-old retired government employee in central Tehran.
“If that is the case, there should be no conflict,” he told AFP.
But other Tehran residents would like the government to have a stronger response than was seen after previous killings of Iranian soldiers blamed on Israel.
“This time we must respond to it with more seriousness and determination,” said Yusof, a 37-year-old private sector employee.
Ehsan, a 43-year-old university professor, said it was “logical” to retaliate, because the Israelis “attacked an Iranian diplomatic building” in Syria’s capital Damascus.
“War is always bad and worrying — a person who has experienced war would never support it, but sometimes to achieve peace, a war is necessary,” he added.
Ahmad Zeidabadi, an expert in international relations, said “it seems that the authorities have not yet made a final decision, as it will probably have serious consequences.”
Tehran has to also take into account any response’s impact on public opinion, which appears to currently be more concerned about economic difficulties than by the war in Gaza, he said.
“The possibility of war worries business leaders, in particular those who depend on the rate of foreign currencies,” Zeidabadi told AFP.
“Some of them fear that it will cause a shortage of food.”
In a sign of these fears, Iran’s rial has plunged to a historic low of around 650,000 to the US dollar on the black market.
The government also faces “a dilemma” on a strategic level, said Ali Bigdeli, an academic specializing in international affairs.
“Israel’s attack can drag Iran to the edge of an unwanted war,” Bigdeli told the reformist newspaper Ham Mihan.
“Entering the war and attacking Israel from Iran’s territory is in the interest of Israel,” he said.
It could offer Israeli Prime Minister Benjamin Netanyahu “a justification for the Gaza war, and will end the Gaza war in the shadow of the war with Iran,” he added.
Former Iranian deputy foreign minister Hossein Jaberi Ansari said that Tehran “should choose the least costly and at the same time most profitable option to respond to Israel.”
“The most legitimate target for an Iranian strike would be Israel’s security and military installations in the territories occupied since 1967, particularly in the Golan Heights,” he said.


Fighting intensifies on Lebanon border as Israel responds to Hezbollah rocket attacks

Fighting intensifies on Lebanon border as Israel responds to Hezbollah rocket attacks
Updated 13 April 2024
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Fighting intensifies on Lebanon border as Israel responds to Hezbollah rocket attacks

Fighting intensifies on Lebanon border as Israel responds to Hezbollah rocket attacks
  • The Israeli army said that it struck “an extensive Hezbollah military complex in Jabal Al-Rihane”
  • Israeli airstrikes also targeted the Iqlim Al-Tuffah area, north of the Litani River, but there were no casualties

BEIRUT: Israel launched a series of airstrikes on Lebanese border towns on Saturday, a day after Hezbollah targeted Israeli military sites with dozens of Katyusha rockets.
Israeli strikes targeted the Aaramta and Al-Rihane Heights in the Jezzine area.
The Israeli army said that it struck “an extensive Hezbollah military complex in Jabal Al-Rihane.”
Early on Saturday, Israeli airstrikes hit the towns of Taybeh, Odaisseh, the outskirts of Hula, and the area between Ramya and Beit Lif in the Bint Jbeil district, destroying a three-story residential building.
Israeli airstrikes also targeted the Iqlim Al-Tuffah area, north of the Litani River, but there were no casualties.
The Majidiya Plain-GHajjar axis, the outskirts of the town of Mari in the Hasbaya District, the Arqoub-Hasbaya area, and the occupied Shebaa Farms were also hit.
Israeli surveillance aircraft continued to fly over the region.
Hezbollah said on Friday that it launched dozens of Katyusha rockets at Israeli artillery positions in response to attacks on southern villages and civilian homes.
The militant group also said it targeted the Ramot Naftali base in northern Israel with assault drones.
According to the Israeli army, about 40 rockets were launched from Lebanese territory, but most were intercepted by the Iron Dome system, and there were no reports of injuries.
Two Hezbollah assault drones had also been intercepted on Friday, it said.
Sunday marks 190 days since the outbreak of hostilities between Hezbollah and the Israeli army on the southern Lebanese border.
At least 274 Hezbollah fighters have been killed, with the group refusing to disclose the number of wounded.
Late on Friday, the group launched a series of attacks on Israeli military locations, including the Miskaf General site, Israeli artillery positions in Zaoura, the Ruwaizat Al-Alam site in the Lebanese Kfarchouba Hills, Al-Marj, Al-Samaka site in the Kfarchouba Hills, and Karantina Hill.
After inspecting damage in areas in the eastern sector and the Blue Line, UNIFIL commander Gen. Aroldo Lazaro said that “a political and diplomatic solution is the only possible way,” and called on all parties “to stop hostile actions so that people can return and rebuild.”
Hezbollah MP Ihab Hamadeh said: “So long as the Israeli aggression against Gaza continues, the resistance front in Lebanon is open against the Israelis, and the work and performance of the resistance are a fortress and protection for Lebanon.”


Syrian state media: explosive device blows up car in Damascus

Syrian state media: explosive device blows up car in Damascus
Updated 13 April 2024
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Syrian state media: explosive device blows up car in Damascus

Syrian state media: explosive device blows up car in Damascus
  • Security incidents, including blasts targeting military or civilian vehicles, occur intermittently in the capital
  • It was not immediately clear who was responsible for the blast or who was the target

DAMASCUS: An explosive device went off in a car in an upscale neighborhood of Damascus Saturday, Syrian state media said, quoting a police source and adding that there were no victims.
Security incidents, including blasts targeting military or civilian vehicles, occur intermittently in the capital. It was not immediately clear who was responsible for the blast or who was the target.
But it came with tensions high in the city after Iran vowed retaliation for an air strike it blamed on Israel.
The April 1 strike destroyed the Iranian consulate in Damascus, killing seven Revolutionary Guards, including two generals.
Syria’s official SANA news agency, quoting a Damascus police command source, said an explosion “in the Mazzeh area resulted from an explosive device detonating in a car in Al-Huda square.”
It added that there were no casualties.
The city’s Mazzeh district is where Iran’s embassy and other foreign missions are located.
Britain-based war monitor the Syrian Observatory for Human Rights said without elaborating that the driver of the car was “a Lebanese national who has yet to be identified.”
The Observatory, which has a wide network of sources inside Syria, said the authorities had cordoned off the scene of the explosion, and that the vehicle had been “slightly damaged.”
Both Damascus and Tehran blame Israel for the April 1 raid on the consular building, but it has not commented.
The Iran-backed Lebanese militant group Hezbollah has a significant presence in the Damascus region.
The strike came against the backdrop of Israel and Hamas’s ongoing war, which began with the Iran-backed Palestinian militant group’s unprecedented October 7 attack on Israel.


Israel finds the body of a teen whose disappearance sparked a deadly settler attack in the West Bank

Israel finds the body of a teen whose disappearance sparked a deadly settler attack in the West Bank
Updated 13 April 2024
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Israel finds the body of a teen whose disappearance sparked a deadly settler attack in the West Bank

Israel finds the body of a teen whose disappearance sparked a deadly settler attack in the West Bank
  • The disappearance of 14-year-old Binyamin Achimair sparked attacks by Israeli settlers on Palestinian villages on Friday and Saturday
  • Israeli Defense Minister Yoav Gallant in a statement on social media urged people not to take the law into their own hands

Al-MUGHAYYIR, West Bank: Israel’s army said Saturday the body of a missing Israeli teen was found in the West Bank after he was killed in a “terrorist attack,” as violence escalated across the Israeli-occupied territory where tensions have simmered for months.
The disappearance of 14-year-old Binyamin Achimair sparked attacks by Israeli settlers on Palestinian villages on Friday and Saturday. Israeli Defense Minister Yoav Gallant in a statement on social media urged people not to take the law into their own hands.
On Friday, Palestinian Jehad Abu Alia was killed and 25 others were wounded in the attack on Al-Mughayyir village, Palestinian health officials said. On Saturday, Israeli troops delayed for several hours the ambulance carrying the 26-year-old man’s body for burial, witnesses said.
Dozens of Israeli settlers returned to the village’s outskirts on Saturday, burning 12 homes and several cars. The Palestinian Health Ministry said three people from the village were injured, one critically. Border police fired tear gas toward villagers who gathered, trying to disperse them.
In the nearby village of Douma, Israeli settlers set fire to around 15 homes and 10 farms, the head of the local village council, Slieman Dawabsheh, told The Associated Press, saying he had been there. “The army came but unfortunately, the army were protecting the settlers,” he said, asserting that it fired tear gas and rubber bullets at Palestinians trying to confront and expel them.
The Israeli military did not immediately comment. The Palestinian Red Crescent said six people were injured by gunfire but did not say who fired.
Tensions in the West Bank have been especially high since the outbreak of the Israel-Hamas war in nearby Gaza on Oct. 7, sparked by the Hamas attack on southern Israel that killed about 1,200 people and took 250 hostages. More than 33,000 Palestinians in Gaza have been killed in Israel’s offensive, according to Gaza health officials.
Hamas since then has been trying to ignite other fronts, including in the West Bank, in hopes of exerting more pressure on Israel. Such efforts have largely failed, though more than 460 Palestinians have been killed by Israeli fire in the West Bank since Oct. 7, most in clashes sparked by army raids but some by vigilante settlers.
There was no immediate claim of responsibility for the killing of the Israeli teen.
According to Israeli media, the teen was last seen leaving the settler outpost of Malachei Shalom early Friday to tend to livestock nearby. The sheep returned to the outpost hours later without him, reports said.
Israel’s Channel 13 TV reported that Achimair’s body was discovered by a drone. The broadcaster said he was not shot but did not elaborate.
Israeli Prime Minister Benjamin Netanyahu condemned the killing “We will get to the murderers and their helpers as we do to anyone who harms the citizens of the state of Israel,” he said in a statement issued by his office.
In 2014, the abduction and killing of three Israeli teens in the West Bank escalated tensions and eventually ignited a 50-day Israel-Hamas war in Gaza, at the time the deadliest round of fighting between the two sides.
Consecutive Israeli governments have expanded Israeli settlement construction in east Jerusalem and the West Bank, territories the Palestinians seek for a future state, along with Gaza. Some are highly developed and resemble suburbs of Israeli cities, while smaller outposts often have only a few caravans.
While Israel has established scores of settlements across the occupied West Bank, the outposts are not authorized, though the government gives them tacit support. The international community overwhelmingly considers all West Bank settlements illegal and obstacles to peace.
Over 700,000 Israelis now live in the occupied West Bank and east Jerusalem — territories captured by Israel in 1967.


Iran says Israel ‘in complete panic’ over Syria attack response

Iran says Israel ‘in complete panic’ over Syria attack response
Updated 13 April 2024
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Iran says Israel ‘in complete panic’ over Syria attack response

Iran says Israel ‘in complete panic’ over Syria attack response
  • “It has been a week that the Zionists are in complete panic and are on alert,” said Yahya Rahim Safavi
  • “They don’t know what Iran wants to do, so they and their supporters are terrified”

TEHRAN: An adviser to Iran’s supreme leader said Saturday that Israel is panicking over a possible retaliatory response from Iran after a strike in Syria which killed members of its Revolutionary Guards.
“It has been a week that the Zionists are in complete panic and are on alert,“
Yahya Rahim Safavi, senior adviser to Ayatollah Ali Khamenei, was quoted as saying by the ISNA news agency.
“They don’t know what Iran wants to do, so they and their supporters are terrified,” ISNA quoted him as saying.
Tehran has blamed Israel and vowed to avenge the April 1 air strike on Damascus that levelled the Iranian embassy’s consular annex, killing seven members of its Islamic Revolutionary Guard Corps (IRGC), including two generals.
Following the strike, which Israel has not commented on, its army announced a leave suspension. It also said officials decided to increase manpower and draft reserve soldiers to operate air defenses.
“This psychological, media and political war is more terrifying for them than the war itself, because they are waiting for an attack every night and many of them have fled and gone to shelters,” Safavi added.
Britain-based war monitor the Syrian Observatory for Human Rights said the April 1 strike killed 16 people. Among the dead were generals Mohammad Reza Zahedi and Mohammad Hadi Hajji Rahimi who were senior commanders in the Quds Force, the IRGC’s foreign operations arm.
Zahedi, 63, was the most senior Iranian soldier killed since a United States missile strike at Baghdad airport in 2020 killed Quds Force chief General Qasem Soleimani.
The strike in Damascus took place against the backdrop of the Gaza war which began with Hamas’s October 7 attack on Israel which killed 1,170 people, mostly civilians.
Tehran backs Hamas but has denied any direct involvement in the attack which triggered relentless bombardment and a ground invasion as Israel vowed to destroy Hamas.
The health ministry in the Hamas-run Palestinian territory says at least 33,686 people have been killed there during six months of war.
Iran does not recognize Israel, and the two countries have fought a shadow war for years.
The Islamic republic accuses Israel of having carried out a wave of sabotage attacks and assassinations targeting its nuclear program.