Amid surplus domestic supply and high global prices, the National Federation of Cooperative Sugar Factories (NFCSF) today said the government should allow exports of additional 5 lakh tonne of sugar in the 2010-11 season.
The government has so far allowed sugar export of 2.1 million tonne (MT), of which 1 MT of shipment is being done via the open general scheme (OGL). Export of sugar has been opened as domestic production is estimated to exceed demand in 2010-11 sugar season (October-September).
"Under OGL, an additional 500,000 tonne of sugar can be easily exported because we have enough stock and global prices are also good. It will help us make payment to cane farmers," NFCSF Managing Director Vinay Kumar told reporters, here.
While total sugar production is expected to be higher at 24.4 MT than annual demand of 21.5 MT, the total carry-over stock is likely to be 5.9 MT this year, against 5 MT in 2009-10 sugar season, he said. That apart, global prices are favourable for exports as white sugar rates are ruling firm at $814/tonne, he noted.
The NFCSF has already written a letter to the Food Ministry seeking more sugar exports, he added.
According to the NFCSF, additional exports would help improve liquidity of mills as they are not making profits with ex-factory sugar still continuing to sell below the cost of production at Rs 26 a kg in Maharashtra and Rs 28.30 a kg in Uttar Pradesh.
According to official estimates, the country's total sugar output has been revised slightly upward to 24.5 MT for 2010-11 sugar season. The cooperative sugar factories body has said that mills have produced 24 MT of sugar till July 15 of the current season and could touch 24.4 MT.
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The NFCSF also mentioned that availability of sugar would not be a problem as the country's sugar production in the next year is again expected be high at 26.5 MT and there could be a possibility to even export at least two million tonnes.
Besides exports, NFCSF also felt that, "it is high time the government to decontrol the industry and allow it to work in a free and fair competitive environment. It will be good for farmers, industry and consumers also."
It has demanded the government to free the industry from the obligation of levy sugar supply for ration shops at lower prices, removal of stock holding limit, monthly free sale release and freedom to export surplus sugar.