Business Daily from THE HINDU group of publications
Friday, Aug 04, 2006
Business Daily from THE HINDU group of publications Friday, Aug 04, 2006 |
|
|
|
|
|
|
|
|
Home Page
-
Sugar Industry & Economy - Exports & Imports Markets - Stocks Harish Damodaran
Cause & effect Notification is actually an amendment of a July 4 order to ban export of sugar Markets wrongly interpret the notification In reality, no relaxation of the ban No decision yet on lifting export ban or permitting shipments on case-by-case basis, says Commerce Ministry official
New Delhi , Aug. 3 If there is a case of markets making too much of a government order, this was it. On Thursday, sugar stocks and prices surged in a seemingly exaggerated response to a notification by the Directorate General of Foreign Trade (DGFT). The notification, issued on Wednesday, amended a July 4 order, banning export of sugar, by substituting the phrase "not permitted to be exported" with "unless specifically permitted for export by DGFT".
Interpretation
In the absence of further details, the marketmen chose to liberally interpret the notification. The Government, it was concluded, has finally lifted the ban and empowered the DGFT to allow exports on a case-to-case basis. This would mean even permitting mills to discharge their white sugar re-export obligations against past imports of raw sugar under the advance license (AL) scheme. Currently, export realisations of Rs 20,000 per tonne free on board, the total outstanding obligations of 12 lakh tonnes are worth around Rs 2,400 crore.
Market reaction
The result: At NCDEX, August contracts for M-30 sugar rose by Rs 20 per quintal during intra-day trade. Individual stocks soared even more — Simbhaoli Sugar by 15.19 per cent, Dwarikesh Sugars by 13.17 per cent, Dhampur by 11.66 per cent, Balrampur Chini by 8.02 per cent, Bannari Amman by 5 per cent, and so on. But the truth is there has been no relaxation of the ban.
What it means
The latest notification simply facilitates shipments of sugar that were cleared from factory premises prior to the ban date and on which the excise authorities had issued ARE-1 forms. These forms are proof that the consignment cleared is specifically meant for export and not for domestic sale. "We had received representations from mills, who had already despatched sugar for exports, which were either lying at the port warehouses or on the road at the time of the ban. Since disallowing these exports would have created excise and re-bagging complications, we have relaxed the ban specifically on these consignments. The Department of Food would corroborate mill-wise data in this regard and we will give individual export clearances thereafter," a Commerce Ministry official told Business Line.
No decision yet
He clarified that no decision had been taken on lifting the current export ban or permitting shipments on a discretionary case-by-case basis that would obviously be a recipe for misuse. What about the total quantity that would now be `opened up' for exports, courtesy the notification? Well, some 78,000 tonnes!
More Stories on : Sugar | Exports & Imports | Stocks | Agricultural Policy
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2006, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|
