M.R. Subramani

Chennai, Aug 28

DECKS have been cleared for the Union Food Ministry to issue a notification on release of sugar for exports to Pakistan. On the other hand, Pakistan is likely to relax its sugar import tender norms allowing delivery of consignments at Attari border.

According to informed sources, the sugar industry has discussed with the top decision makers at the Centre with regard to the notification and it is likely to be issued soon.

"The Union Government has been told that those obliged to export sugar should not be provided an opportunity to give an excuse that they were unable to ship due to lack of the release order," the sources said.

Sugar mills in the country have an obligation to totally export 15 lakh tonnes against imports of raw sugar equivalent to that amount. The mills had resorted to imports to overcome the problems of cane shortage and under utilisation of their capacity due to a lower crop during the current crop year (October 2004-September 2005).

"The Centre has made it clear that it will not stand in the way of fulfilment of the obligations. Therefore, the release order is due at any time," the sources said.

The release order is necessary for mills to supply sugar to exporters for shipment to Pakistan. This is since each mill can offload only the quantity stipulated by the Food Ministry each month.

The Government has released 34 lakh tonnes of sugar under the free-sale quota for the mills during the July-September quarter. For August, the quota released is 11 lakh tonnes.

The mills see a good opportunity in Pakistan opening its market for Indian sugar after four years to control its domestic prices.

On the other hand, another hurdle in sugar exports has been cleared with Pakistan authorities agreeing for delivery of consignments at the Attari border. In the last three tenders, the Trading Corporation of Pakistan (TCP) had sought quotations for delivery at Karachi.

"We talked to authorities in the Pakistan Commerce Ministry and TCP and explained to them the benefits of allowing us to deliver at Attari. They have agreed to our suggestion and the next tender could see some changes in the tender norms," the sources said.

Though TCP has floated tenders for one lakh tonnes of sugar this month, it has finalised purchase of 50,000 tonnes from two firms. One is from the UAE-based Al Khaleej, which will ship 25,000 tonnes at $390 a tonne. The other is the US-based Worldwide Resources Co, which has agreed to offer sugar at $324.

Last month, TCP bought one lakh tonnes of sugar from Al-Khaleej at $366.

Indian exporters expect to strike deals at around $370 a tonne, though Pakistan is looking for shipments at $10 lower.

(This article was published in the Business Line print edition dated August 29, 2005)
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