Sugar mills urge govt to lift export ban

The South Indian Sugar Mills Association (SISMA) has urged the Centre to lift the ban on exports. The country is having excess stocks which, coupled with surplus production this year, will take inventories to much higher levels than actual domestic consumption requirement.

While the carryforward stock is at 45 lakh tonne, this year's production is pegged at 230 lakh tonne against the domestic consumption of 190 lakh tonne. This will result in carryforward stocks for the next season at 85 lakh tonne.

Unless the government lifts ban on exports the industry will not be able to sustain the costs on holding sugar in godowns. The mills are incurring a loss of Rs 150 per quintal for holding the stocks. This will make the production uneconomical and mills may have to suffer further losses.

Despite exports, we will still be left with substantial stocks which will not push the domestic prices up from the current level," said M Srinivasan, president of SISMA.

He said unless the ban is lifted immediately, the domestic price, which already on the declining trend from about Rs 1,780 per quintal ex-factory three months ago to less than Rs 1,500 currently, will face further decline resulting in huge loss to the mills. "This will also affect cane payments to farmers," he said.

Srinivasan said even after the recommencement of exports, mills will not be able to clear off the surplus in the country. Sugar mills in south have exported in the past to Sri Lanka, Bangladesh and Pakistan.

On July 4, the government, with a view to control the rising prices of essential commodities, had banned exports till March 3. Union agriculture minister Sharad Pawar on July 16 had stated that the government was planning to lift the ban from the next crushing season beginning October this year.

The association has also urged the government to ease the restriction on sourcing sugarcane. Currently, mills are not allowed to purchase sugarcane from farmers, who are more than 15 kms away from the factory. This should be extended to at least 25 kms.

"This restriction has made the mills economically unviable as most of them have higher crushing capacities and are facing a shortage of cane," Srinivasan added.