The Government has notified the exports of sugar under Open General Licence (OGL) without any quantitative restrictions for 2011-12 (October-September) season.

A notification to this effect was issued by the Food Ministry effective May 11.

The notification comes almost a week after an inter-ministerial panel decided to remove quantitative restrictions on sugar exports.

Millers to benefit

As a result, millers will be free to export sugar under OGL without requiring any release order from the Directorate of Sugar for 2011-12, till further orders.

However, this excludes exports to the US and member countries under the European Union under preferential quota.

Allowing such exports would help the sugar millers to clear cane payment arrears that stand at around Rs 10,000 crore. The notification said that traders, who have imported raw sugar under the Advance Authorisation Scheme, under which mills are obligated to export after processing on grain-to-grain basis, are also not required to obtain the export release order.

However, the export release order is required for mills exporting sugar under AAS on a tonne-to-tonne basis, the notification says.

On this basis, mills are allowed to process imported raw sugar, undertake a sale in the local market and fulfil the export obligation by shipping an equal quantity later.

So far, India has exported over 2.6 million tonnes in the current season including the carry forward quotas from the previous year. The total shipments in the current season could touch about 4 million tonnes.

India's sugar production is estimated to be about 26 million tonnes, while consumption is projected at 22 million tonnes.

Prices crash

Meanwhile, global sugar prices crashed by about $70-80 a tonne ahead of the commencement of season in Brazil.

A weakening rupee is likely to help the exporters make Indian sugar competitive in the global market despite a downward trend in prices.