After a gap of 18 months, the government today reintroduced export restriction on sugar in an attempt to improve the availability of the sweetener in the domestic market to bring down prices.

A notification released by the Directorate General of Foreign Trade (DGFT), today reintroduced export release order system for sugar, which was done away with on July 31, 2007. The DGFT notification is with retrospective effect from January 1, 2009.

Sugar exports have been regulated from January 2001. As per the conditions, a release order has to be obtained from the Directorate of Sugar, before exporting the sweetener abroad. But in view of the bumper production of sugar in 2006-07 and 2007-08 sugar seasons (October-September), the regulatory condition was dispensed with in July 2007. The relaxation was extended indefinitely by DGFT on December 31, 2008.

In fact, the Directorate of Sugar has not been issuing any release orders for exports since January 2009, and hence, no exports of the sweetener was taking place. However, there was no formal decision in this regard. Rise in sugar prices, which has a weightage of 3.62 per cent in WPI- based inflation, has been a cause of concern for the government.

According to the latest projections by the Indian Sugar Mills Association (ISMA), country’s sugar output in the season ending September is likely to touch a four-year low of 14.5 million tonnes. This is a decline of over 45 per cent from 26.5 million tonnes in the previous season.

The dip can be attributed to lower acreage under sugarcane and over 10 per cent drop in recovery.

The government has take steps like release of higher quantities for market sale, allowing duty free import of raw sugar by mills, duty free import of one million tonne refined sugar by government agencies and imposition of stock limits on traders.

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