Indian sugar mills association

Deadline for sugar export permit extended

Date:	06 Jan 2012

Source:	The Financial Express

Reporter:	Banikinkar Pattanayak

News ID:	824

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New Delhi: The food ministry has granted one more month to sugar mills and factories to apply for permits against an export quota to better tap a slow rise in global demand for the sweetener.

The factories that will ship out sugar from their own production can now apply for the permits until January 31, while those wishing to source sugar from elsewhere for exports will be allowed to seek licences until February 15, official sources said on Thursday.

Under the quota, mills and cooperatives in Maharashtra have been allowed to export a maximum of 3,65,824 tonnes, while those in Uttar Pradesh and Karnataka can ship out 2,54,428 tonnes and 1,35,903 tonnes, respectively. A two-week delay in cane crushing in Maharashtra beyond the usual period of early November also hurt the sourcing of supplies of several factories.

In November last year, an empowered group of ministers headed by finance minister Pranab Mukherjee had approved sugar exports of 1 million tonnes under the open general licence.

The food ministry issued permits for the exports of 356,237 tonnes of sugar as of January 3, compared with 397,409 tonnes for which licences were sought, one of the sources said.

The country was sugar-surplus in 2010-11 after two successive years of a domestic shortage when it was forced to import the sweetener to meet the shortfall, driving up global prices.

Sugar mills and cooperatives in India, the world`s second-largest producer, had demanded that the government extend the deadline by at least 15 days to fill the export quota as demand slowed due to surplus stocks globally and year-end holidays.

US raw sugar futures crashed 27% in 2011, the first annual fall in four years, as higher output in Asia and Europe offset a decline in production in biggest producer Brazil. Global sugar production will surpass demand by 4.5 million tonnes in the marketing year through October 2012, after around two years of a shortage, according to the International Sugar Organisation. However, exports are still more remunerative as domestic wholesale prices have remained subdued more than six months now due to adequate supplies.

Wholesale prices of the S30 refined sugar variety in Mumbai are ruling around R3,000 to R3,300 a quintal.

“Now that people are back from holidays, international sugar demand is seen picking up and we have started receiving a lot of inquiries. We expect that the entire quota of 1 million tonnes can be contracted in the next 15 days. International prices will likely inch up in the coming days,” said Vinay Kumar, the managing director of the National Federation of Cooperative Sugar Factories.

Production rose 17% to 7.57 million tonnes until December 31 since the marketing year began on October 1, according to industry data.

India is likely to produce 24.7 million tonnes in 2011-12, compared with 24.3 million tonnes a year before, according to food ministry estimates. The country expects to consume around 21.5 million tonnes, leaving enough scope for exports.

Industry executives say the country has the potential to ship out 3-4 million tonnes of sugar in 2011-12.

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