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In the wake of high food inflation, Food Ministry today said it is in no hurry to issue licence for 5,00,000 tonnes of sugar export and would be “cautious” while allowing overseas shipment of wheat.
The Food Ministry has not been issuing the sugar export licence despite the Empowered Group of Ministers (EGoM) approving the export of five lakh tonnes of the sweetener via the Open General Licence (OGL) on March 22.
“We have agreed for sugar exports. These (licence) are all departmental procedures. It takes its own time. We are not in haste. We have to first look into our own market,” Food Minister Mr K V Thomas told reporters here.
On wheat exports too, the minister said that in view of lower global wheat production and the proposed National Food Security Act, “we have to be very cautious in allowing exports“.
Significantly, the Agriculture Ministry, headed by Mr Sharad Pawar has proposed that wheat exports be allowed in the wake of bumper production of 84 million tonnes this season.
“Agriculture Ministry has proposed wheat exports and that has to be looked into by the EGoM. We will discuss and take a decision,” Mr Thomas said.
The country’s food inflation is still ruling high at 9.18 for the week ended March 26.
With sugar production estimated to rise to 24.5 million tonnes in 2011-12 (October-September), against domestic demand of 22 million tonnes, the government had earlier allowed mills to meet their export obligations of one million tonnes under the Advance Licence Scheme (ALS).
Mr Pawar had earlier written to the Finance Minister Mr Pranab Mukherjee stating that sugar export should be allowed to prevent a situation of cane arrears to farmers.
The industry has been demanding exports under OGL as there is an exportable surplus of about 1.5 million tonnes of sugar even after meeting the export obligation under ALS.
They also pointed out that ex-mill price of sugar has fallen below the cost of production. In Uttar Pradesh, cost of sugar production is Rs 2,950/quintal, while ex-mill price is Rs 2,800/quintal.
Retail prices of sugar have declined sharply in the national capital to Rs 30-32 per kg from nearly Rs 50 per kg in January last year.
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