The sugar industry is peeved over the Commerce Ministry’s latest move to regulate exports that were freed up by the Food Ministry last week.

Stating that exports would be ‘free’, the Director General of Foreign Trade (DGFT) has asked sugar exporters to mandatorily register their contracts before making the shipments of the sweetener.

Exporters can submit one application for issue of registration certificate (RC) subject to a maximum of quantity of 10,000 tonnes in the current season ending September 2012, the DGFT said.

Further, it states that exports have to completed within 30 days of issuing the RC. Failure to export the allowed quantity within the stipulated time would invite debarment from further registration and may lead to penalties. Further, subsequent registration certificate will be issued only after submission of proof of having exported against previously obtained RC, it said.

“The DGFT notification is in total contradiction to the Food Ministry’s notification issued on May 11, which had no quantity or time restrictions,” said Mr Abinash Verma, Director General, Indian Sugar Millers Association (ISMA).

Now, instead of release orders from Sugar Directorate, mills have to get registration certification from DGFT and that too for a maximum quantity of 10,000 tonnes. ISMA has appealed for immediate withdrawal of the DGFT notification.

“Such a registration requirement and control as ordered by DGFT will badly stall sugar export and there is almost no way the mills would be able to clear cane arrears which have reached Rs 10,000 crore,” Mr Verma said.

A high-level inter-ministerial committee under Prime Minister, Mr Manmohan Singh had recently decided to free sugar exports without any quantitative restrictions and do away with the release order mechanism.

“The reason and logic of decision taken at the inter-ministerial level has been completely reversed by the DFGT order,” Mr Verma said.

The Government had permitted exports as millers were saddled with huge stocks due to a bumper harvest this year. Sugar production is set to touch 26 million tonnes while consumption is pegged at 22 million tonnes. So far the country has exported about 2.6 million tonnes including the previous year’s quotas.