An Empowered Group of Ministers (EGoM) today decided to allow additional export of 5 lakh tonnes of sugar due to estimated high production and surplus stocks after meeting domestic demand.
The government has allowed exports of 1 million tonnes of sugar so far this year in two equal tranches under the Open General Licence (OGL).
"EGoM has approved export of 5,00,000 tonnes of sugar," highly placed sources said.
Industry had been demanding that the government allow another 1 million tonnes of sugar exports considering the huge surplus stock and higher global prices.
Almost all political parties from Maharashtra were demanding more exports so that mills can make payments to sugarcane farmers.
Food Minister KV Thomas had said that mills owe Rs 2,591 crore to the farmers till May 15 of the current 2010-11 season (October-September). Another Rs 211 crore sugarcane arrears are pending from previous seasons.
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Mills have not been able to make timely payment to cane farmers this season due to fall in ex-mill prices.
Sugar production of India is estimated at 24.2 million tonnes in the 2010-11 season against 18.8 million tonne last year. The annual demand is pegged at 21-21.5 million tonne.