Govt to take call on regular sugar exports at end of Dec

The government will take a decision on permitting regular exports of sugar towards the end of December, following an assessment of total production of the sweetener in the 2010-11 crop year.

"I will take the review of the production report (sugar) in the third week of December and then will take a decision (on exports)," Food and Agriculture Minister Sharad Pawar told reporters here.

Most sugar mills have not even commenced crushing operations and hence, the production review could not take place this month, he said.

The ministry has pegged sugar production in the 2010-11 sugar year (October-September) at 24.5 million tonnes, as against the annual domestic demand of 22.5-23 million tonnes. However, the industry has projected that production of the sweetener will touch 25.5 million tonnes this year.

Yesterday, a senior Food Ministry official said the government may consider permitting regular exports of sugar if output in the 2010-11 sugar year surpasses the estimate of 24.5 million tonnes.

The official had said the ministry will review the sugar production situation before deciding to permit exports. "If the government decides to ease exports during December-end, there is enough time to enter into export contracts in the next calendar year," he noted.

The government recently allowed the export of about 1 million tonnes of sugar through the Advance License Scheme (ALS), under which mills are required to meet an equivalent export obligation by March, 2011.

Sugar mills imported over 2 million tonnes of sugar between 2004 and 2008 through the ALS to make up for the shortage in domestic production.

After a gap of two seasons, sugar production of India -- the world's second largest producer and biggest consumer of the sweetener -- is estimated to be higher than domestic demand. In 2008-09 and 2009-10, sugar production in the country stood at 14.7 million tonnes and 19 million tonnes, respectively. Six million tonnes of sugar have been imported by India since February, 2009, to meet domestic demand.