FoodMin to consider demand to remove sugar export limits

Limit on exports, penalty imposed when there was a premium on sugar, says Isma director

The Food Ministry will consider the sugar industry's demand to scrap export restrictions in anticipation of surplus production next year, a top government official said.

"I will take up the issue with the Commerce Ministry," Food Secretary Sudhir Kumar said at the Kingsman-Platts global sugar conference here, adding that the matter will be considered once the industry submits a formal representation.     

The Indian Sugar Mills Association (Isma) wants export norms to be eased in view of the surplus production expected next year and huge carry-over stock. At present, sugar exports up to 25,000 tonnes can be registered with the Directorate General of Foreign Trade (DGFT). A penalty of 1% is imposed on millers if the shipments aren't made in the required time.

The limit on exports and the penalty system were imposed when there was a premium on sugar, Isma Director General Abinash Verma explained.

At present, sugar prices are lower in the global market and there is a need to ease these norms. "We will be mainly exporting raw sugar next year, which could be done in large quantities of 55,000 tonnes and more," Verma said, while demanding relaxation of the export norms.

Noting that mills, especially in Uttar Pradesh, have incurred a loss of about Rs 3,000 crore in the 2012-13, Verma said boosting exports will help to clear arrears to cane farmers. Recently, Food Minister K V Thomas had suggested that sugar mills should focus on exports to clear the arrears.     

Addressing the conference, the Food Secretary said the Centre had partially decontrolled the sugar industry in May and now it is for the state governments to remove controls on sugarcane pricing and cane reservation areas.

"So far, decontrol is partial. Even now, sugarcane prices are controlled and there is cane reservation. We do hope these restrictions are removed in the future," Kumar said. He said Karnataka has enacted a law to set sugarcane prices based on the output of sugar and its by-products. "More states are likely to follow suit."