Government to boost sugar exports via free sale route

The government intends to promote sugar exports via free sale route in the next sugar year, starting October, said a senior government official.

"The re-export route will lose its charm as import of raw sugar is expensive now and overall exercise becoming less viable. Further, we are likely to have a bumper sugarcane crop and rise in production capacities. This would give India a good chance as a sugar exporter," he added.

Last week, the government had allowed Indian Sugar Exim Corporation (ISEC) to export 1.5 lakh tonne sugar to Pakistan but on the condition that exports would be made against tenders issued by the Trading Corporation of Pakistan only. ISEC can source sugar from any mill in the country and export grains only to TCP and not any private trader in Pakistan.

With these exports to Pakistan, in the current sugar year (October-September), exports are expected to touch 12 lakh tonne compared with the set target of 10 lakh tonne, the official said. India has sugar re-export obligation of 20 lakh tonne till 2007.

Since October 2006, total sugar exports are about 5 lakh tonne. The official said despite the rise in exports this year, prices will remain under control. India's consumption is about 185 lakh tonne. "There was some carryover from last year also and as this year's output is also good, there will be no problem in domestic supply, despite exports," the official said.