Financial Daily from THE HINDU group of publications
Wednesday, May 10, 2006
Financial Daily from THE HINDU group of publications Wednesday, May 10, 2006 |
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Sugar Agri-Biz & Commodities - Exports & Imports Govt considering free sugar exports for mills Kohinoor Mandal
Sweet & bitter Senior officials at the Centre seriously considering the move. ISMA has argues in favour of allowing individual mills to export. No progress yet on move to allow STC export 3 lakh tonnes sugar.
Kolkata , May 9 Apart from the State Trading Corporation (STC), the Union Government may allow individual sugar mills to export sugar outside existing re-export obligations. Sources said that the Union Ministry of Agriculture might accept the industry's demand for free export of sugar. "It appears that the senior officials are now seriously considering this option," sources said. It is learnt that senior members of the Indian Sugar Mills Association (ISMA) had succeeded in convincing the Centre on this matter. They argued that if STC could be allowed to export, then why not individual mills too.
Price advantage
"After all, by allowing STC to export, the Union Government has accepted that there is surplus sugar and it needs to be exported. Moreover, Indian producers are currently enjoying an advantage on the price front in comparison to the ruling global prices," sources said. ISMA further argued that STC was a mere canalising agency and did not have any expertise in international sugar trade, compared to the industry. When contacted by Business Line, both Mr S.L. Jain, Director General of ISMA, and Mr C.S. Nopany, President of ISMA, confirmed that the association had urged the Union Government to remove all barriers on sugar exports. At present, individual mills export sugar only as part of their re-export obligation. Under the Advance Licence Scheme, some of the sugar mills had imported raw sugar during 2004-05 when the market faced a shortage in production.
`Better placed'
"Why restrict exports to STC only? After all, they would only be earning some commission. The industry is better placed to conduct sugar exports," Mr Jain said. Union Agriculture Minister Mr Sharad Pawar has already announced that the Government would positively consider STC's request to export three lakh tonnes of sugar. The minister announced this at a press conference on March 30, but till now, STC sources said, no progress had been made. "The minister's decision is yet to get the Union Cabinet nod. So, there is some delay," sources said.
Production
India's sugar production during the current year ending September is likely to be around 19 million tonnes as against 13 million tonnes last year. During 2006-07, production is expected to touch 22.5 million tonnes. In the current year, the industry hopes to export around 1 million tonnes and this is likely to double next year.
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