Indian sugar mills association

Delay in notifying sugar expor

Date:	01 Dec 2011

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News ID:	741

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New Delhi: The delay in issuing the official notification allowing export of one million tonne of sugar despite an EGoM giving it the go-ahead a week ago—is expected to shrink margins due to softening of global prices, according to ISMA, an industry body of private mills.

On November 22, an Empowered Group of Ministers (EGoM) on food, headed by Finance Minister Pranab Mukherjee, permitted one million tonne of sugar exports under the open general.

licence (OGL) for the 2011-12 season (October- September) to ensure cash flow to millers to make timely payment to farmers. “If the government`s intention of giving some relief to sugar mills from exports is to be realised, the notification should not be delayed any further,” Indian Sugar Mills Association (ISMA) Director General, Abinash Verma told PTI.

With a declining trend in global sugar prices, Indian exporters may soon lose the present export margin of about R1 to R1.50 per kg, he said.

Verma also noted that if export release orders are not issued at the earliest, exports may become unviable, sugar mills` losses will mount and cane price arrears get piled up.” A food ministry official said that the ministry will issue the notification when finalised.

The mills, however, are worried as the global sugar prices have been falling since last fortnight.

The November contract of white sugar traded at the London Futures Exchange (LIFFE) was ruling at $659 per tonne before the export decision. Prices, however, fell on November 22 (when the EGoM allowed sugar exports) to $ 624 per tonne.

The March contract is down to $605 per tonne.

The government has allowed sugar exports as the country`s production is estimated to be higher at 25-26 million tonne this year, as against the annual demand of 22 million tonne.Last year, India had exported 2.6 million tonne of sugar both under OGL and advance licence scheme

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