Indian sugar mills association

EGoM may decide on sugar expor

Date:	22 Nov 2011

Source:

Reporter:

News ID:	713

Pdf:
Nlink:

New Delhi: An empowered group of ministers (EGoM) on food is expected to consider on Tuesday fresh sugar exports during the marketing year through September 2012, a senior government official said on Monday.

Sources said the food ministry will leave it to the EGoM, headed by Finance Minister Pranab, to firm up the quantity of sugar that can be shipped out, although exports may be allowed in phases. Last month, food minister KV Thomas had said the decision on fresh sugar exports will be taken in the first week of November when the peak festival season ends, after reviewing sugar supply. Cash-strapped sugar mills have been seeking approval for the exports of 4 million tonne of sugar during 2011-12 to take advantage of a lower-than-expected production in top exporter Brazil as local sales realisation drops.

The country expects to produce 24.7 million tonne of sugar in 2011-12, compared with its anticipated consumption of around 21.5 million tonne, leaving room for some exports, according to the food ministry estimate. India shipped out 2.6 million tonne of the sweetener, including 1.5 million tonnes under the open general licence, last year.

Sugar mills are demanding an early announcement of the sugar export policy as global prices are falling due to softening demand and a further delay in taking a decision by the government would squeeze export possibilities. Moreover, plentiful supplies in the domestic market will ensure sugar prices remain subdued.

Sugar prices have remained subdued for more than six months now at around R32 a kg due to a surplus production in 2010-11, hurting margins of companies that had paid high prices to farmers for cane purchases last year.

The liquidity crunch also affected the mills` ability to clear all payments relating to sugarcane purchases, with mills in Uttar Pradesh struggling to buy cane at the elevated state-fixed price of R240 a quintal. Mills owe as much as R2,591 crore in sugarcane arrears between October 1 and May 15 of the 2010-11 marketing year and another R211 crore from previous seasons, mainly due to the fall in domestic prices, according to the official data.

Agriculture minister Sharad Pawar has said the government should consider allowing sugar exports on a monthly basis so that both mills and farmers will benefit.

News

Navigation