Anticipating a bumper production of sugar in the coming season (2022-23), industry body Indian Sugar Mills Association (ISMA) on Thursday wrote to Piyush Goyal, minister of commerce and Industry, Food and Public Distribution, urging him to allow exports of 8 million tonne of sugar under open general licence (OGL) during the next sugar season starting October 1.
In the letter written to the minister, a copy of which is with FE, ISMA president Aditya Jhunjhunwala said an immediate announcement of next year’s sugar export policy will help the sugar mills to enter into future contracts at better prices.
Reiterating that this is the right time to review the current sugar export policy for next year since as the current global prices are firm, the letter said mills can plan their production for next season in advance and added this system will give a fair chance and equal opportunity to all the mills to participate in exports.
On June 10, ISMA had written to the food secretary too, requesting an early announcement of next year’s sugar export policy.
According to ISMA, the area under sugarcane cultivation is expected to be 2% higher than the current season. Backed by a good monsoon, as predicted by the IMD, sugar production is also likely to be higher than the current season’s production of 39.4 MT. “Even after a higher diversion of sugar towards production of ethanol next year, there will still be sufficient stock available for exports,” ISMA said.
Speaking to FE on condition of anonymity, a sugar miller said fears of lower availability are behind the Centre’s dilly-dallying on the issue of announcing sugar export policy for next year. “However, there fears are unfounded. We are expecting a bumper production next year too”, he said.
In a separate letter to the minister, ISMA also requested the minister to allow sugar mills to export an additional 10 lakh tonne in the ongoing 2021-22 season so mills can fulfil their export commitments in the current season itself and there is no repercussion in the next season.
According to ISMA, sugar mills had applied for 1.7 MT of export, of which orders were issued for only 0.8 MT. “Planning for production of raw sugar for export is done in advance, based on the export contracts. Almost 0.6-0.7 MT of raw sugar is surplus and would lie idle with the mills or at ports if it is not exported. The mills now have no option to process it nor sell in the market. Export is the only viable option in the current situation,” it said.
Allaying the Centre’s fears that a shortfall of sugar may lead to a spike in domestic sugar prices, ISMA president said that even after record exports of about 86 lakh tonne upto May 2022, the all-India ex-mill average domestic sugar prices have hovered around Rs 33-35 per kg.
“Therefore, there is no reason to believe that the sugar export of this additional 10 lakh tonnes in the current season would affect the domestic market,” Jhunjhunwala said.