Sugar exports for the current season ending this month is estimated at 26.54 lakh tonnes (lt), up from a meagre 3.48 lt last season.
The Indian Sugar Mills Association (ISMA) pegged raw sugar exports at 11.5 lt and shipments of white sugar at 10.5 lt. Another 4.5 lt were shipped under the Advance Authorisation Scheme, wherein the white sugar is exported against imports of raw sugar made earlier at zero per cent Customs duty. Iran, Sudan and Somalia were the top three export destinations for Indian sugar.
“The volume can be attributed to two things. First, there was a surplus stock at the end of the last season and second, there was a spurt in international prices between October and December last year, when prices rose to about 19 cents a pound. Many contracts were signed during this period,” said Abinash Verma, Director-General, ISMA.
In February, the Government had announced an export subsidy of ₹3,300 a tonne on raw sugar for 40 lt to be shipped between February 2014 and September 2015. The scheme was to enable the cash-starved industry to pay sugarcane arrears to farmers amounting to over ₹8,000 crore as of August 31.
The scheme, likely to have a new formula fixed by the Cabinet Committee on Economic Affairs, did not benefit producers much as expected due to the timing of the announcement and only about 6.5 lt were exported under the incentive scheme this season.
Late announcement“The export subsidy didn’t help much as the policy was announced when mills had almost closed operations — by February 28. Also, the subsidy was for production of raw sugar when mills generally produce white sugar unless there’s a specific contract. They announced it so late that the time for people to enter into a contract and produce raw sugar was hardly there. If it continues then people will produce a good quantity of raw sugar,” Verma said.
With with a ₹3,300 subsidy, global prices need to rule around at least 17 cents for raw sugar exports to become feasible, he said.
According to ISMA, total sugar production in the 2013-14 season is estimated at 243 lt.
The carryover stock for next season is likely to be around 75 lt of which 50 lt will go towards domestic consumption during October-November before crushing operations begin after the Diwali break.