Govt may allow more sugar exports after assessment

Food Minister KV Thomas today said the government will consider more sugar exports after assessing the progress of domestic crushing activities and global prices.

Early this week, an Empowered Group of Ministers (EGoM) on Food headed by Finance Minister Pranab Mukherjee had allowed the export of one million tonne of sugar under Open General Licences (OGL) in an effort to improve the cash flow of mills and enable them to make timely payment to cane growers.

"We will consider allowing more sugar exports after assessing the pace of crushing and international sugar market," Thomas told reporters on the sidelines of a real estate function here.

Noting that crushing operations have been delayed in the ongoing 2011-12 marketing year (October-September), the minister said the availability of sugar for exports would depend on how crushing progresses in the coming days.

The country is expected to produce 2-3 million tonne of surplus sugar this year and the government is closely monitoring the supply and demand situation, he added.

As of now, most mills in Uttar Pradesh and Maharashtra -- the two major sugar-producing states -- have not yet started crushing operations.

The EGoM decided to allow the export of only one million tonne of sugar this year, though industry had demanded permission for overseas shipment of three million tonne.

In the 2010-11 marketing year (October-September), the government had allowed 2.6 million tonne of exports, out of which 1.5 million tonne was made through the OGL in three tranches.

Sugar production in India -- the world's second-largest producer and biggest consumer of the sweetener -- is estimated at 25-26 million tonne in the current marketing year.

The industry has been demanding sugar exports since the start of this marketing year, but the Food Ministry was initially reluctant to give permission as it feared a price rise during the festival season, when demand is generally higher.