Sugar firms seek permits for 6 lakh tonne exports

The domestic sugar industry has sought permits for exporting nearly 6 lakh tonne sugar since the ban withdrawal. More than half of that "� about 3.31 lakh tonne "� is under the open general licence (OGL) scheme, while the rest is under advance licence (AL).

The fact that permits sought for OGL exports are higher than those for AL exports means companies are fetching competitive prices for exports.

As the country is expecting a bumper sugar production this year "� 230 lakh tonne versus 191 lakh tonne last season, a much higher quantity is likely to be exported this year.

While domestic sugar realisations are low at Rs 14,750 a tonne (ex-factory) in Uttar Pradesh and Rs 13,000 a tonne (ex-factory) in Maharashtra, export realisations at $335 (Rs 14,866) a tonne is profitable for mills, particularly those in Maharashtra. However, mills will have to incur additional expenses on transportation to ports in the Rs 1,500-2,000 a tonne range.

Companies, which are exporting sugar under AL, include Sakthi Sugars, Renuka Sugars, Simbhaoli Sugars and Eid Parry, while the ones under OGL exports comprise Bajaj Hindusthan, Renuka Sugars, Eid Parry and Rajshree Sugars, among others.

The former group of companies imported duty-free raw sugar between 2002-03 and 2004-05 sugar seasons (October-September), with an obligation to re-export.

The government had imposed the ban on sugar exports in July last year, which was lifted in phases "� December 18 for AL and January 11 for OGL.

In order to facilitate sugar exports, the Union government has recently exempted the quantity of sugar that a mill exports from levy obligation.

During 2005-06 (April-March), the country exported 3,16,850 tonne sugar. In the current year, exports surged to 10,04,317 tonne before the ban came into effect in July.