In a major step towards removing the curb on exporting farm products, a high-level meeting chaired by the prim minister today decided to free the export of sugar for the current season and abolish the export floor price for onions for two months.

However, traders said the decision on sugar was delayed since international prices were at record lows, with the new Brazilian crop expected by June. In fact, raw sugar futures fell to the lowest in one year at 20.60 cents a pound on New York’s commodity exchange, after the move.

Domestic sugar mills are not hopeful of selling more than 1-1.5 million tonnes of sugar abroad, as international prices have dropped.

The meeting also decided to constitute a panel under the chairmanship of Prime Minister’s Economic Advisory Council Chairman C Rangarajan to offload more foodgrains through the Public Distribution System and exports.

“The high-level meeting on farm exports today decided to remove all curbs on the export of sugar by putting it under open general licences and abolish the export floor price for onion,” said a senior official who participated in the meeting.

The decision on sugar assumes importance, as mills have almost Rs 10,000 crore of dues to farmers. The directive would be applicable on the one million tonnes of sugar, exports of which were held up in the absence of a clear direction from the government. “In other words, sugar mills won’t need to come to the ministry for permission to export,” the official added. However, the department would reserve the right to impose a cap on sugar exports in case abnormal quantities are shipped.