Sugar exports likely at 1.4 mt in FY07

The country has exported 0.4 million tonne sugar since the government withdrew the ban on sugar exports. Moreover, licences have been sought for exporting another 0.95 million tonne. Total exports in FY07 are estimated at 1.4 million tonne against 0.31 million tonne in FY06.

Companies exporting sugar under the advance licence (AL)include Sakthi Sugars, Renuka Sugars, Simbhaoli Sugars and Eid Parry, while the ones doing so under the open general licence (OGL) are Bajaj Hindusthan, Renuka Sugars, Eid Parry and Rajshree Sugars among others. The sugar industry is keen to ship 1.5-2 million tonne sugar in the current year. AL companies had imported raw sugar at nil duty during FY03 and FY05.

In spite of the government's March 24 decision to offer export subsidy of Rs 1350 a tonne for coastal mills and Rs 1450 a tonne for others, mills have been unable to avail the same as the Election Commission is still to clear the subsidy. The EC sees the announcement of a subsidy during the run-up to the Uttar Pradesh Assembly elections as a violation of the model code of conduct.

"The export subsidy buzz has put the domestic mills at a disadvantage since international buyers have started offering lower rates," said an industry source.

"Sugar exports are not profitable. We are under obligation to export even though we incurred a loss of Rs 800 a tonne," said V Manickam, managing director of Sakthi Sugar Mills.

Sugar production during the 2006-07 season (October-September) is likely to touch a record 25 million tonne against 19.2 million tonne during the last season and a demand of 19 million tonne.

The government had imposed a ban on sugar exports in July last year and subsequently lifted it for AL companies on December 18 and for OGL on January 11.