500,000-tonne OGL sugar export gets Centre's nod

After a delay of almost three months, the government today finally allowed the export of 500,000 tonnes of sugar under open general licence (OGL). OGL is a permit the government gives to mills to export without any restriction or conditions.

The announcement for export of 500,000 tonnes of sugar under OGL was made in December 2010, by the then food minister, Sharad Pawar. The decision was then, however, kept on hold in view of high inflation and the matter referred to an empowered Group of Ministers (eGoM).

The food ministry had decided to take views of all ministries after referring the matter to the eGoM, as there was some difference over sugarcane production and yields in different states.

The EGoM, headed by finance minister Pranab Mukherjee, met today and decided to allow normal sugar exports not exceeding 500,000 tonnes, food ministry officials said. India’s sugar production is estimated at 24.5 million tonnes in 2011-12 sugar year (October-September) against 18.8 mt he previous year. The annual demand is pegged at 22 mt.

The EGoM also decided to allow state-owned trading firms to import 500,000 tonnes of pulses for 2011-12, but withdrew the 15 per cent subsidy to cover possible losses for offloading the imported pulses in the domestic market, officials added.

India is a net importer of pulses, as production is estimated at 16.5 mt this year, while demand is 18-19 mt.

The eGoM also extended the scheme under which the government provides a subsidy of Rs 10 per kg on imported pulses to be sold through ration shops for another six months, till September.

It also extended the stock-holding limit on sugar, edible oils and pulses till September, a step aimed at controlling inflation.

The sugar industry hailed the government’s decision to allow export of up to 500,000 tonnes, saying this would help mills in making timely payments to cane farmers. “It’s a welcome move and will improve the ability of mills to pay farmers on time,” PTI quoted Indian Sugar Mills Association president, Narendra Murkumbi.

Earlier, sugar prices in the wholesale markets had risen today over rumours that the government might finally allow the exports.

In Kolhapur, a key market in top-producing Maharashtra, the most traded S-variety closed up by 0.07 per cent at Rs 2,675 ($59.4) per 100 kg. In the international markets, though, sugar fell for a second day in New York on speculation over Indian exports.