How High Can it Go?

India’s sugar export subsidy is probably illegal under World Trade Organization rules, but that hasn’t stopped the country from – once again – making adjustments to it. And surprise, surprise, the adjustment will send the subsidy higher, not lower.

In late January, India’s food minister signed off on an export subsidy rate of 4,000 rupees ($64) per ton of raw sugar. That’s up from a subsidy of 3,300 ($53) rupees per ton, which was set in February of 2014 and then promptly increased to 3,371 ($54) rupees in August.

India exported 2.8 million tons of sugar last year with the aid of this subsidy, and this year, the Indian sugar lobby says it will need to offload about 2 million tons to keep domestic prices high.