Ban on advance licence as well

SUGAR EXPORTS

The sugar export ban in place till March next year also applies to those companies with export obligations under the advance licence scheme, said a senior official of the directorate of sugar.

The ban encompasses the sugar export quota of 1.5 lakh tonne awarded to the State Trading Corporation (STC) on June 6, the official said.

The official, however, said the directorate had recommended to exempt such companies from the ban. The ban notification issued by the Directorate General of Foreign Trade (DGFT) had not made it clear whether it applies to such companies too.

Sugar companies, such as Dhampur, EID Parry, Renuka and Simbhaoli among others, have been importing duty-free raw sugar. Under the advance licence scheme, these companies have to re-export one tonne of white sugar against every 1.05 tonne of raw sugar imported in three years' time.

Sugar sale outside India fetches a price that is higher by about Rs 200 a quintal compared with domestic prices.

Chandra Shekhar Nopany, president, Indian Sugar Mills Association, said, "I suspect there is some error in the decision to ban exports by companies with export obligations. Such companies are legally required to export sugar. The government should advance the ban till September or October as the prices have already fallen by about Rs 100 per quintal in the last one month."

A bumper sugar production is expected in the coming season. In addition, the ban would pressure the prices. The sugar firms would not realise good profits and in turn cane growers would be affected, said Nopany.

The sugar companies are not willing to speak on the issue as the notification is not very clear. They, however, maintain that if the ban applies to those with export obligations, the government would have to extend the period under which the export obligation needs to be carried out.

In addition, it may also have to amend the law that requires exporting sugar under the advance licence scheme.