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The Indian Sugar Mills Association (ISMA) has urged the Food Secretary to allow sugar mills to export an additional 10 lakh tonnes of the commodity shipments are the only viable option left for raw sugar produced this season (October 2021-September 2022),
“You would know that planning for production of raw sugar for export is done in advance based on export contracts. Since export orders are not issued for the total contracted quantity of sugar, excess raw sugar is lying with sugar mills” ISMA President Aditya Jhunjhunwala said in a letter to the Food Secretary on Friday.
“The mills who have already manufactured raw sugar now have no option as they cannot convert the same into white as their crushing operations have concluded for the season and therefore, the mills can neither process the same nor can sell in the market. In the current situation, export is the only viable option left for raw sugar,” he added.
According to ISMA, as export orders were issued for part contracts, it will also lead to further complications like litigation and loss due to hedging. “Further, the goodwill of sugar mills as also the country will be at stake due to non-fulfilment of contracts” the letter mentioned.
Estimates revised
Recently, ISMA in its committee meeting reviewed the sugar production estimates from 350 lakh tonnes of sugar to 360 lakh tonnes, mainly due to higher cane availability in Maharashtra, Karnataka, and Tamil Nadu. In addition to this, domestic consumption is now estimated at 275 lakh tonnes.
ISMA added that even after record exports of around 86 lakh tonnes upto the end of May, all-India average domestic ex-mill sugar prices have not increased much and are hovering around ₹33-34 per kg, which is still below the cost of production of sugar. “In view of the increased estimated sugar production, we request you to kindly allow the sugar industry to export another 10 lakh tonnes of sugar in the current season. This will not affect the domestic sugar situation in any case and will leave sufficient sugar to meet the needs of the country for at least two-and-a-half months into the next season starting October 1, 2022” the ISMA President added in the letter.
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