Govt reviews sugar availability, no decision on exports

The government today reviewed the prices and availability of sugar in domestic market in the backdrop of strong industry demand for allowing exports. 

An empowered group of ministers (EGOM) on food, headed by Finance Minister Pranab Mukherjee, however, did not take any decision in this regard due to the absence of three key ministers -- Agriculture Minister Sharad Pawar, Commerce Minister Anand Sharma and Food Minister KV Thomas. 

"Sugar was discussed but no decision was taken," a senior official said after the EGOM meeting.

Although exports have not been banned technically, the government has disallowed sugar shipments by putting different restrictions in the wake of high food inflation.  

Sugar is selling at Rs 32-35 per kg in the retail market, where prices have remained stable for last several months in the wake of higher production this year.

According to the government estimates, sugar production is expected to be 24.5 million tonnes in the 2010-11 crop year (October-September), against around 19 million tonnes last year. The domestic consumption is pegged at 22 million tonnes.

A decision on the issue is expected in the next EGOM meeting, which is likely to take place in the coming few weeks.  

Although food inflation has declined to 11.05 per cent for the week ended February 5, it still remains in double digit, making the government cautious over existing food situation.

The industry led by Indian Sugar Mills Association has demanded that government should at least allow 5,00,000 tonnes of export, which was permitted in December 2010, but was put on hold because of high inflation.

"There is a surplus of one million tonnes of sugar, which we can export under open general licence," the industry body had said. The mills have been allowed to export about 1.2 million tonnes of sugar that they were obliged to do by March this year under Advance Licence Scheme.