Mills can export sugar lying at ports if they import same qty

The Food Ministry has agreed to allow sugar mills, including India's largest refiner, Renuka Sugars, to export over 1 lakh tonnes of the sweetener stuck at the Kandla Port on the condition that they will import an equal quantity within the next four months.

According to a senior official, the ministry has given in-principle approval to a few mills that had approached it with a request to allow export of white sugar stuck at the Kandla Port.

But the ministry has asked them to give an undertaking that they will import an equal quantity of raw sugar, process and sell it in the domestic market within four months of the issue of an export release order, the official said, adding that four companies, including Renuka Sugars and three trading firms, had sought permission to export over 1 lakh tonnes of white sugar.

Although there is no official ban on sugar exports, the Food Ministry has not been issuing export release orders since January, 2009, as domestic production was lower than the annual demand of 23 million tonnes in the 2008-09 and 2009-10 sugar years (October-September).

The country has imported over five million tonnes of sugar since February, 2009, to meet the shortfall.

Last week, Food and Agriculture Minister Sharad Pawar had said the government will allow the export of about 2 lakh tonnes of imported sugar stuck at ports, provided mills give in writing that they will import the same quantity in future, whenever the need arises.

"Railways, on our instructions, were sending wagons only to transport fertilisers (from ports). So sugar could not get (transported). We get complains from the industry that sugar is getting spoiled. So, they said they would like to export," he had said.

"If they are ready to give us in writing that they are ready to import the same quantity, we have no objection," Pawar had said when asked whether the government would allow the export of white sugar stuck at various ports.

The minister said that the only 2-3 lakh tonnes of sugar, imported 8-10 months back, were lying at the ports and that is not a significant quantity for a country like India.

India, the world's second largest producer and biggest consumer of sugar, is estimated to produce 18.7 million tonnes of the sweetener in 2009-10, as against 14.6 million tonnes in the previous year. The annual demand is pegged at 23 million tonnes.

Both the government and industry are hopeful that the output in 2010-11 will surpass domestic demand.