The Hindu Business Line : No Govt notification yet on allowing sugar exports

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No Govt notification yet on allowing sugar exports

Harish Damodaran

Mills in a dilemma on enquiries from prospective buyers

Delay effect
Mills unable to make any price or delivery schedule offers.
Domestic prices hit with fall in ex-factory realisations.

New Delhi , Dec. 2

More than two weeks have passed since the Union Cabinet approved a partial lifting of the ban on sugar exports from the country. But a formal notification from the Commerce Ministry - more specifically, the Directorate General of Foreign Trade (DGFT) - giving effect to the decision is yet to see the light of the day.

The Cabinet had, on December 18, allowed mills to export sugar, subject to their holding advance licences (AL) against which re-export obligations were pending. The AL scheme requires mills to re-export one tonne of white (refined) sugar for every 1.05 tonnes of duty-free raw sugar imports undertaken by them in the past against these licences.

Besides permitting AL holders to discharge their outstanding re-export commitments — estimated at around 12 lakh tonnes (lt) — the December 18 meeting had also deliberated upon the Food Ministry's proposal to open up an additional export window of 10 lt outside of the AL scheme. It was, however, finally decided to restrict exports only to AL holders and take a call on the additional 10 lt quantity sometime in mid-January.

According to highly-placed sources, the final minutes of the Cabinet decision went the same day to the Prime Minister's Office and, after 5-6 days there, were circulated to the relevant Ministries (Commerce and Food).

Contrasting situation

"Since then, there has been complete bureaucratic inertia compounded by the year-end holiday season. As things stand, the DGFT is yet to issue the notification," they noted, while pointing to the contrasting situation when the ban on exports was imposed on July 4.

"At that time, not only did the notification come promptly and as something that no one least expected, but it was even made to apply retrospectively from June 22. But when it concerns allowing exports even on a limited scale, nobody shows such urgency," the sources added.

Mills, on their part, say that there have been enquiries from prospective buyers following the December 18 Cabinet decision. "But in the absence of a firm notification, we cannot make any price or delivery schedule offers," they aver.

Major gainers

The biggest gainers from this delay are Brazil and Thailand, who have utilised India's prolonged absence in the international arena to capture its traditional markets in South Asia and Africa. The inability to export has also hit domestic prices, with ex-factory realisations dropping below Rs 1,400 per quintal in Maharashtra, Rs 1,450 in Tamil Nadu and Rs 1,600 in Uttar Pradesh. Since last year, prices have fallen by roughly Rs 250 per quintal.