A day after Union food minister K V Thomas said the government was open to the idea of allowing some export of sugar during the current crop marketing year that started in October, agriculture minister Sharad Pawar put his weight behind this, too.
Pawar said the country should enter the export market in a big way and capitalise on higher global rates, as production during the current crop year is projected to be more than domestic demand. Sugar output in India, the world’s second-largest producer and biggest consumer, is estimated at 25-26 million tonnes (mt) in the 2011-12 marketing year (October-September), as against the annual domestic demand of about 22 mt.
The government is yet to announce the export policy for the current year. The country had exported 2.6 mt in the previous marketing year, of which 1.5 mt was through Open General Licence, in three equal tranches.
“There is surplus sugar. This is a golden time for India to enter the global market in a big way and get a better price, which will ultimately be provided to cane growers,” Pawar told reporters on the sidelines of a function on international practices in innovative agriculture.
The Indian Sugar Mills Association has been demanding export of four mt this marketing year to help mills improve their cash flows. At the current global price of $670-680 per tonne, mills will earn a premium of Rs 3.5 per kg from exports of the sweetener vis-a-vis domestic rates.
Thomas had said an Empowered Group of Ministers on Food, headed by finance minister Pranab Mukherjee, might meet on November 16-17 to decide on allowing exports. Sugar output in India rose to 24.3 mt in the 2010-11 marketing year from nearly 19 mt the previous year. In the current marketing year, the government has pegged output at 25 mt and the industry has estimated 26 mt.
Though overall wholesale price-based inflation moderated to 9.72 per cent in September from 9.78 per cent in August, the rate of price rise in sugar increased to 7.45 per cent from 6.28 per cent over the period.
Meanwhile, on rising food inflation, the agriculture minister said it was true that the rise in global prices of petrol and diesel had an impact on domestic food inflation, but the solution was in increasing farm productivity to bring down prices.
Food inflation rose to a nine-month high of 12.41 per cent for the week ended October 22.
