The food ministry today extended the deadline for exporting 2 million tonne of sugar by three months to December as only a fourth of it has been shipped so far.
In March, the government had allowed sugar export in view of record domestic output of 32 MT. Mill-wise, Minimum Indicative Export Quotas (MIEQ) were allocated by the ministry in May.
"The date of export of MIEQ allocated to sugar mills is extended by three months up to December 31," an official order said.
Mills can export either sugar produced in the current 2017-18 season or the next 2018-19 season (October-September), it said.
As per the official data, only about 5 lakh tonne sugar has been exported so far. The shipments have been lower due to non-availability of raw sugar which is in demand in the global market.
The industry made a representation that it does not have raw sugar for export and requested the ministry to consider extending the deadline so that fresh raw sugar from the 2018-19 cane crop can be produced for overseas shipment.
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The government has taken slew of measures to bail out cash-starved sugar mills as well as cane farmers. Record sugar production in 2017-18 season ending September depressed local prices resulting in huge cane arrears which touched the peak of Rs 23,232 crore in May-end.
The government doubled the import duty on sugar to 100 per cent and then scrapped the export duty on it.
The government also made it compulsory for millers to export two million tonnes of sugar even as the global prices were low.
With mounting cane arrears, the government was forced to announce Rs 8,500 crore package for the industry and creation of buffer stock.
The package included a soft loans of Rs 4,440 crore to mills for creating ethanol capacity. The government will bear an interest subvention of Rs 1,332 crore for this.
The Centre had also announced an assistance to mills of Rs 5.50 per quintal of cane crushed, amounting to Rs 1,540 crore. Around Rs 1,200 crore was allocated for creation of buffer stock of sugar.
The country's sugar production is estimated to have touched a record 32 MT in the 2017-18 season as against 20.3 MT in the previous year. The demand is around 25 MT.