Sugar mills expects to earn Rs 150-200/qtl more from exports

Sugar mills, which were allowed yesterday to export 5 lakh tonne of sweetener, are expecting sales realisation from overseas sales to be about Rs 200 per quintal higher as compared to domestic rates.   

"At present, the global prices are higher by about Rs 150-200 per quintal than the domestic rates. We hope to get about Rs 3,000 per quintal from exports," Indian Sugar Mills Association (ISMA) Director General Abinash Verma said.

He pointed out that global sugar prices were higher by about Rs 500 per quintal earlier this month, but since then it has fallen to about $700/tonne from $800/tonne. 

The government had yesterday allowed sugar mills to export up to 5,00,000 tonne of sugar under Open General Licence (OGL) as output is likely to exceed demand by about 2.5 million tonne.

Earlier, it had allowed mills to meet export obligations of about one million tonne under Advance Licence Scheme (ALS).

Reacting on the government's decision to allow exports, Verma said this would ensure sugar prices do not fall further in the domestic market and help mills in recovering their cost of production.

In the retail market of the national capital, sugar prices have fallen to Rs 30-32 per kg from nearly Rs 50 per kg in January last year. 

India's sugar production is estimated at 24.5 million tonne in 2010-11 sugar year (October-September) against 18.8 million tonne in the previous year. The annual demand is pegged at 22 million tonne.

ISMA feels the country can export 1.5 million tonne of sugar under OGL after taking into account one million tonne of sweetener already exported under ALS.