Enough stock for another 2 mt sugar export: Govt

Anindita Dey / Mumbai Jun 07, 2012,
Business Standard
The Union ministry of food has worked out an internal limit of two million tonnes of sugar that could be exported under Open General Licence (OGL) till September, without affecting domestic prices.

According to official sources, the ministry expects final output in the current season to be 25.8 mt, against the earlier estimate of 25.2 mt. They said crushing of cane had ended in north India, but some mills in south India were still reporting production.

The current sugar marketing year started in October last year. India is the world’s second-largest producer and biggest consumer. Output was 18.6 mt last year.

Before sugar export was brought under OGL, freeing it from quantitative restrictions, the government had allowed export of two mt.Officials said under the new regime, 170,000-180,000 tonnes of sugar had been registered with the Directorate General of Foreign Trade ( DGFT) for shipment abroad till date. They added the ministry was comfortable with availability of a three-month stock at its disposal for managing domestic demand at any given date. Beyond this limit, the surplus could be considered for exports, they said.

The commerce ministry told millers, once the OGL decision was announced, to register export contracts with it, to keep pace with the quantity of shipment. With the new regime, the DGFT raised the ceiling in each registered contract (RC) from 10,000 tonnes to 25000 tonnes, equivalent to one vessel load for white sugar. An applicant has the liberty to seek split RCs for export through more than one port, within the overall limit of 25,000 tonnes.Also, the time limit for completing export has been extended from 30 days to 60 days from the date of issuing the RC.

Among other reasons why the Union government keeps control on the marketing of sugar is its requisitioning of what is termed ‘levy sugar’, the quantity it requires mills to supply (at a price it sets) for subsidised supply through ration shops. It is mandatory for mills to sell a tenth of their production to the government at this lower rate. This levy sugar quota is then allocated to states and Union Territories for the Public Distribution System.