With the projected estimates of good sugar production the Union food and agriculture minister, Sharad Pawar, on Wednesday signalled that it was the right time to decide on the lifting of the ban on sugar exports.
He told the industry that if they want total de-control of the sector they should also be prepared for phasing out of the captive cane area so that the farmers could have the competitive advantage of selling to the best bidders.
Addressing the 72nd annual general meeting (AGM) of the Indian Sugar Mills Association (ISMA) the minister said that according to government estimates sugar output in 2006-07 would be 22.7 million tonne, while the industry has projected it in the range of 23 to 23.5 million tonne. ?These estimates point to the fact that this is the right time to decide on lifting the ban on sugar exports,? he said and added, ?It is the up to the Cabinet to decide on the issue.?
Pawar had earlier, at the behest of the industry, pleaded for lifting of the export ban, but the Union finance minister, P Chidambaram disapproved saying that the domestic price situation needed to further settle down.
In response to the rising prices in the domestic market, the government had clamped a ban on sugar exports in July, 2006. The global prices were lucrative at at time, ruling in the range of $420 to $460 a tonne.
The domestic price rise was due to a combination of several factors like hoarding and manipulation in the future markets and not due to shortage. Since the imposition of the export ban, the industry has been lobbying for its removal. The government had at the same time also allowed sugar imports against low duty, but no substantial amount has entered the country.
However, against an earlier import regime about 2 million tonne raw sugar was imported and the industry faces an obligation to export 2 million tonne white sugar. So far only 1.1 million tonne white sugar has been exported.
ISMA president Chandra Shekhar Nopany pleaded that the industry be allowed to take the advantage of the 12 million tonne trade in the Indian Ocean. As the global prices have fallen to around $350 a tonne, the government should subsidise inland transport and ocean freight to boost exports.
Pawar called upon ISMA to conduct studies on the impact of the present regulatory regime on the industry, technological requirements and strengthening management practices in sugar cooperatives.