The Union government on Tuesday allowed export of a million tonnes of sugar for the 2011-2012 crop marketing year that started in October and also lifted the stock holding limit on the sweetener from November 30.
Welcoming the twin decisions of allowing exports and lifting the stock holding limit, Abinash Verma, director-general of the Indian Sugar Mills Association said it was very unlikely that mills would make hefty profits after this decision, since international prices had softened. Still, export of a million tonnes would help improve the industry’s cash flow by Rs 2,800-2,900 crore, considering an average ex-mill price of Rs 2,800-2,900 per quintal.
| SWEETENER |
| * Export of 1 million tonnes sugar allowed for 2011-2012 under open general licence |
| * Stock holding limit on sugar to be lifted from November 30, 2011 |
| * Export of 10,000 rice each allowed for Kenya, Somalia and Djibouti |
| * Export of 1,600 tonnes of skimmed milk powder, 24,000 tonnes of wheat, 21,200 tonnes of rice, 1,200 tonnes of pulses and 2,400 tonnes of edible oils to Bhutan have been allowed |
| * Exports to Africa and Bhutan to be on a government-to-government basis |
“This money will help the industry in making payment to sugarcane farmers and reduce inventory carrying cost. The withdrawal of holding limits will generate demand for stocking purposes,” Verma said.
The exports, the first in this season, will be under open general licence (OGL). Exports under OGL do not require any government permission, but should be within the quota allocated by it.
Officials said the food ministry was in favour of limiting the export to 500,000 tonnes, but the agriculture ministry (headed by Sharad Pawar, veteran politician from Maharashtra) wanted it to be raised higher, in view of the sharp drop in price of sugarcane.
Meanwhile, the Empowered Group of Ministers (eGoM) on these subjects, headed by finance minister Pranab Mukherjee, also decided not to extend the stock holding limit on sugar beyond November 30. At present, any sugar trader is not allowed to hold more than 500 tonnes.
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India’s total sugar production in 2011-2012 is expected to rise to a little over 26 million tonnes as against 24.2 mt in 2010-2011.
The eGoM also decided to export 10,000 tonnes of rice to Kenya, Somalia and Djibouti on a government-to-government basis. Officials said the eGoM had also allowed the export of 1,600 tonnes each of skimmed milk powder, 24,000 tonnes of wheat, 21,200 tonnes of rice, 1,200 tonnes of pulses and 2,400 tonnes of edible oil to Bhutan, also on a government-to-government basis. These exports will be irrespective of the general ban on export of edible items.