Govt to decide on waiving sugar export-obligation

The food and commerce ministries are at loggerheads over exempting sugar mills from export- obligation and the Cabinet will now decide whether or not the obligation can be waived beyond December 31, official sources said.

The problem arose after food ministry sought deferment of an obligation on millers to export sugar, citing imports of the sweetener to meet deficit and contain prices.

However, the commerce ministry wants millers to honour the terms of the the Advance Licence Scheme (ALS), under which they are required to re-export the same quantity that was imported at zero duty.

"...We (commerce) are not agreeing...It will go to the higher levels for the decision. The decision on that will be taken by the Cabinet Committee on Economic Affairs (CCEA)," an official told PTI, adding that there were some differences of opinion between the ministries of commerce and food.

The issue of extending the deadline for export obligation, which expires on December 31, has been referred to the CCEA following inter-ministerial differences. The issue was earlier considered by the Empowered Group of Ministers on December 14.

With the deadline for exporting refined sugar processed from imported raw sugar going to end this month, millers have been demanding that the government should extend the date further to meet their pending re-export obligations.

The export obligation for mills refers to 2004-05 season (October-December), when about 21.4 lakh tonnes of sugar was imported.