Govt to allow sugar exports under OGL

To re-impose 60% import duty from today.

The government would notify export of sugar under the open general licence (OGL) by January 3, said a senior official.

Also, in the wake of higher supplies in the country, it has decided to revert to 60 per cent import duty from January 1.

“The validity of duty-free sugar imports expires on December 31. From January 1, we will revert to the earlier import duty structure on sugar,” he said.

The government had scrapped the duty to boost imports in a year of tight local supplies, which were leading to a price rise. “Economically, it makes sense to keep a moderate duty on imports to promote balanced trade. We will have to take a call on whether it can be applied suo motu to sugar... If something needs to be done, we will take a call later,” the official said. Ample sugar output this season has made imports unattractive for mills, which are looking at exports to cash in on high global prices.

Output prospects
The official said the government was so far sticking to its output estimate of 24.5 million tonnes for the current sugar season that began in October but added that it would have a better idea by mid-February, after the harvest.

So far, the arrivals had mainly been from the ratoon crop, he said. “Ratoon crop is higher and its arrivals should be over by early January. By the end of January-early February, the planted cane crop will start coming in and by February 15 we will have a clear idea of where we are heading,” he said.

With over five million tonnes stockpile from the last season, total supplies are seen around 30 million tonnes, way higher than the annual demand of 22-23 million tonnes. India had produced 18.9 million tonnes of the sweetener in 2009-10.

Export norms
On allowing exports under OGL, he said,“The modalities for OGL sugar exports would be notified by Monday.” He said the government might give mills three months to export sugar under OGL. Farm minister Sharad Pawar had earlier this month said the government had decided to allow mills to export about 500,000 tonnes sugar under OGL. Mills may be allowed to export 2.5 per cent of their average annual sugar output since 2008-09 under OGL, another senior government official had earlier said.

He had said production for each mill would be calculated on the basis of a weighted average of its output from the 2008-09 season to 2010-11.