Sugar industry demands additional export quota of 10 lakh tonnes

Ahead of the secretaries’ committee meeting, the sugar industry demanded the release of 10 lakh tonnes (lt) of additional export quota to factories and the return of exports to the “free” category from next season starting from October 1. A significant amount is likely to be cleared even if the government does not approve the full 10 litres, sources said.

The Secretaries’ Committee, led by the Cabinet Secretary, is expected to make a decision this week on the matter after considering its possible impact on the domestic market, the sources said.

In a letter to the Food Secretary, Aditya Jhunjhunwala, Chairman of the Indian Sugar Mills Association (ISMA), reportedly conveyed industry demands citing better availability of sugar cane over the next season (October-September) while the mills of Maharashtra are likely to start crushing in October itself.

He further said that even after a record export of 86 liters between October and May of the current season, the average non-sweet prices have not increased and are still hovering around ₹32-35/kg which is lower. at production cost. “Therefore, there is no reason to believe that this 10 liter sugar export in the current season will affect the domestic market,” Jhunjhunwala said.

Average selling price

According to data from the Ministry of Consumer Affairs, the average retail price of sugar across India has been hovering between ₹40.96 and ₹41.73 per kg for the past six months.

The ISMA president said the opening balance on October 1 will be enough to meet demand for two and a half months and at that time new season sugar will be available.

The export of sugar (raw, refined and white sugar) has been placed under the restricted category from June 1 and is valid until October 31, according to a notification published on May 24 by the Directorate General of Foreign Trade (DGFT) . It allowed export only by permit and set a maximum quantity of 100 liters for the whole season.

In the first week of June, the Ministry of Food issued a notification allocating 10 liters of quota on a pro rata basis to exporters who applied for the permits. But the mills were allocated 8 liters to sell to these exporters after taking into account the quantity in transit.

Raw stocks stuck with grinders

Jhunjhunwala said the sugar mills requested 17 liters of export quota based on the contracts they had already signed, but the government only granted 8 liters. As a result, the 6-7 liters of raw sugar that are in the mills have been stuck as they plan raw sugar production in advance based on export demand, he pointed out. He urged the government to heed industry demand bearing in mind these stocks which cannot currently be refined or shipped without a permit.

According to data from the Ministry of Agriculture, India’s sugarcane acreage till July 15 this year was 53.31 lakh hectare (lh), a notch below India’s 53.7 lh. one year ago. Last year’s total acreage was 54.97 lh for the whole season.

The ISMA president also requested that 80 liters of sugar be put under open general license (OGL) in the next season between October and April. He said it was a good time to review the sugar export policy and announce the same for next year as it will help millers secure future contracts and plan their production in advance.

He also said that the government may review the export policy after April, based on actual/estimated production and exports, while reinstating the Maximum Allowable Export Quota (MAEQ) system, which was put in place. last implemented during the 2020-21 season.

Published on

July 18, 2022

Rachel J. Bradford