Won't take hasty decision on permitting sugar exports: Govt

Food Minister K V Thomas today said the government will not take any "hasty decision" on allowing sugar exports, as its first priority is to protect the interests of consumers.

"This year, sugar production is good, but we have got internal market. We are more concerned with the domestic market. We will take the decision of export (sugar) only after giving priority to maintaining price level within the country," he told reporters on the sidelines of a meeting here.

The minister noted that although sugar prices are coming down in the domestic market, the government still needs to be "very cautious on exports".

The retail price of sugar has declined to Rs 32/kg now from Rs 48/kg in January in most parts of the country.

When asked India is losing out on export opportunities as global prices are high currently, Thomas said, "I am more concerned with my farmers and domestic consumers. I will not jump into a hasty decision (on sugar exports)".

At present, the government has kept the export of 0.5 million tonnes (MT) of sugar under the open general licence (OGL) scheme on hold due to high inflation. But earlier, it had allowed mills to meet their export obligation (ALS) of nearly one million tonnes by March, 2011.

 Meanwhile, sugar industry bodies Indian Sugar Mills Association (ISMA) and National Federation of Cooperative Sugar Factories (NFCSF) have petitioned the government to immediately allow exports to prevent arrears to sugarcane farmers from mounting, as mills are facing losses of about Rs 150 per quintal on the sale of sugar.

In Uttar Pradesh, the cost of sugar production is Rs 2,950 a quintal, while the ex-mill price is Rs 2,800 per quintal. Similarly, in Maharashtra, the cost of production is Rs 2750 per quintal, whereas the ex-mill price is Rs 2,600 per quintal.

The sugar industry has estimated an exportable surplus of three million tonnes this year, considering good sugar output.

The industry has pegged India's sugar output at 25 MT for the 2010-11 sugar year (October-September), as against demand of 22 MT, while the government's production estimate is marginally lower at 24.5 MT for the same period.

Till February, about 16.3 MT of sugar has been produced, against 13.7 MT in the year-ago period.