Maharashtra govt presses Centre to allow liberal sugar export under OGL

The Maharashtra government has appealed to the central government to allow a million tonnes (mt) of sugar exports in November. And, that this could be increased by half a million to a million tonnes each in December, January, March and April.

The government has told the Centre that India is in a position to export four to five mt in the current crushing season, in view of the country’s estimated production of 26 mt. Chief minister Prithviraj Chavan has, in a communication to Union food minister K V Thomas, said mills in the state would benefit from an early decision.

A senior minister, who did not want to be identified, told Business Standard: “Even after four mt for food security, a huge balance quantity (after meeting domestic demand) of 5.7 mt would remain with the industry, the share of Maharashtra being 3.4 mt. This needs timely disposal by way of exports before the March 2012 arrival of Brazil and Thailand sugar in the international market.”

The minister made it clear that the exports need to be allowed under Open General Licence (OGL).

The Federation of Cooperative Sugar Factories in Maharashtra, representative body of 170 mills in the state, has also made a strong pitch for exports. “An early decision is crucial for Maharashtra, as it will enable factories to realise better returns and reduce their losses, and to make timely payments to the sugarcane farmers,” said Vijaysinh Mohite-Patil, chairman.

The state government’s plea comes when sugar mills in the state have a carry-forward stock of 3.5 mt and mills are expected to produce 8.7 mt, against the original estimate of 9.3 mt by the end of the current season.

The mills are currently facing rough weather, due to delay in commencement of the crushing season due to a prolonged monsoon, as well as ongoing agitation by cane growers for a higher advance payment.

The state government and the Federation have also appealed to the Centre for revision of levy sugar prices (the quantity compulsorily taken for allotment to ration shops). The minister said levy sugar prices had not been revised for five seasons. The revision was essential due to increased cost of inputs.