The government is likely to clear sugar exports to Bangladesh and Pakistan, under the re-export obligation,early next week.
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Millers had been pushing for the release order for quite a while to encash this opportunity.
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"As per the release mechanism, we are waiting for the government notification.Exports are not possible with out this notification," said a leading mill owner.
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The re-export obligation is to import raw sugar with a commitment to re-export the same quantity of white sugar in a period of 24 months.
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The sugar sector is under the government control faces marketing restrictions such as levy and free-sale quota. Under the current marketing restrictions, mills are required to deliver 10 per cent of their production to the government as "levy" under the public distribution system.
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The remaining 90 per cent is the "free sale" sugar, which regulates the quantum of sugar that mills are allowed to sell in the open market in a particular month.
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Exports, sans those under the re-export obligation, come under the free-sale quota governed by the Sugar Control Order, 1966.
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This order is,in effect,a restriction on how much sugar any individual mill can sell, preventing producers from selling or agreeing to deliver any quantity or remove stocks from a bonded factory warehouse unless directly authorised to do so by the Central government.
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Industry insiders said the government has delayed the decision as it wanted to discourage exports in the remaining period of the current sugar year, which is less than two months now, as the closing stocks are low.
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"However, it seems now that the domestic demand can be met comfortably with less than a month of the current season remaining," an industry expert said.
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India's sugar output this year is around 135 lakh tonne with a closing stock at 45 lakh tonne, which is lower than the previous year's 85 lakh tonne, as per the estimates released by Indian Sugar Mills Association. The output in this year may rebound to a comfortable 180 lakh tonne in the next year, thereby allowing the country to export.
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Indian millers eye Pak tender opening today
Indian millers, especially in Uttar Pradesh, are eyeing the Trading Corporation of Pakistan sugar import tender, schedule to open on Monday.
The tender will open export channel by rails,said sources. If Indian bidders are selected, they will export via the Attari border route.
Pakistan has recently accepted a bid from a Dubai-based firm for $390 per tonne, cost, insurance and freight (CIF). Indian bids are likely to be lower, at around CIF $365-375 a tonne, sources said. |
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