With sugar production in 2010-11 crop marketing year expected to be more than the annual demand, the government on Monday allowed exports of 5,00,000 tonne of the sweetener to allow mills take benefit of high global prices.
It also increased the levy sugar price (the price at which government purchases sugar from mills for meeting its PDS obligations) to Rs 1,847.05 per quintal, up 5.09% from last year’s Rs 1,757.50 per quintal.
?Export of sugar will be linked to production and the department of food and public distribution will monthly assess the situation and take a call on whether further exports could be allowed,? food and agriculture minister Sharad Pawar announced while addressing the 76 th annual general meeting of Indian Sugar Mills Association (ISMA).
Pawar said the food ministry would work out modalities (regarding exports under OGL) within the next 10 days.
“We will ensure that the opportunity for availing the benefit of exports is available to all sugar mills,” he said, adding that allowing exports would have no adverse impact on retail prices.
The government had earlier allowed the export of about 1.5 million tonne of sugar through the Advance License Scheme (ALS) and also the imported sugar stocks that were stuck at ports.
Under ALS, mills have to fulfil their export obligation of about 1 million tonne of sugar by March, 2011 against the duty-free imports during 2004-2009.
?The industry has applied only around half of the total exports permitted under this window and as of today no application for release order is pending with the department. However, in order to further maximize return, the first tranche of export under the OGL will also be permitted,? Pawar said.
He also said any further decision on export would be linked to production.
On the repeated disconnect between the Centre fixed ‘Fair and Remunerative Price’ (FRP) and the state determined advisory price (SAP) for sugarcane, the minister while acknowledging that state’s have a right to fix the SAP as permitted by the Apex Court urged them to give their inputs on the FRP in time so that the gap between the two prices for cane is bridged, if not do away with the dual announcement.
India’s sugar production as per government estimate in 2010-2011 is expected to be around 24.5 million tonne, while consumption is projected to be around 23 million tonnes, leaving a surplus of around 1.5 million tonne.