Commerce min for removal of curbs on sugar exports

A key wing of the commerce ministry has favoured the unshackling of controls over sugar exports to allow the industry to flourish, especially the value-added segments.

A key wing of the commerce ministry has favoured the unshackling of controls over sugar exports to allow the industry to flourish, especially the value-added segments.

At present, the food ministry regulates the sugar sector and an empowered group of ministers, headed by finance minister Pranab Mukherjee, decides how much of the sweetener can be exported from time to time. Mills complain that a delay in decision making process in exports and the government control of monthly sugar sales by them in the domestic market has been hurting their returns.

?… the government is surely within its rights to say that to manage domestic prices, it will not allow more than a specified quantity of sugar exports. But, at least, we can have some stability on that rather than release sugar from time to time,? Director General Of Foreign Trade Anup Pujari told FE.

Sugar isn?t a homogeneous commodity, and to promote shipments of value-added sweetener that will fetch better returns, some stability in the export policy is needed,

Pujari said.

?For me, what is important is not just the export of sugar but the export of that sugar which is the best. That will happen when I allow you to make the best sugar and make you free to do so. Therefore, if the domestic prices of sugar are managed by the department of food, we would be in favour of maintaining some stability in exports so that people develop their expertise,? Pujari said.

India allowed exports of 1.5 million tonne under the open general licences for the year through September 30 in three equal tranches, starting April last year, after a gap of two years when it faced acute shortage. Industry executives said sugar mills lost out on a chance to maximise export returns by cashing in on soaring global prices in February and March 2011 due to the late decision by the government.

In November last year, the EGoM had approved sugar exports of one million tonne during under the open general license.

Food minister KV Thomas said last month that further sugar shipments in 2011-12 will be allowed at ?an appropriate time?. India, the world?s second-largest sugar producer and the biggest consumer, expects to produce around 24.7 million tonne of sugar in the year through September 30, compared with the consumption of around 21.5 million tonnes.

The industry says the country can easily export 3-4 million tonne in 2011-12, although the food ministry wants further shipments to be allowed only when it is convinced of adequate supplies for local consumers, as estimates in previous years had sometimes been vastly out of sync with actual production.

Pujari said sugar isn?t a seasonal commodity like onion, and so its output can be better forecast.

Sugar prices in the domestic market have remained stable for around six months now due to adequate supplies for a second straight year, making exports more remunerative. Ex-factory prices of S30 grade sugar in Mumbai shed R6 per quintal on Thursday and are ruling in the range of R2,892 to R2,966

a quintal.

Sugar mills often blame low sales realisation in the domestic market and the lack of a clear export policy for non-payment of arrears to farmers for cane purchases. Earlier this week, the Supreme Court asked sugar mills to repay around R900 crore to farmers in Uttar Pradesh for cane purchases during 2006-08 with in three months.

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First published on: 20-01-2012 at 00:43 IST