While the sugar industry expects 7-8 lakh tonnes (lt) of additional quota that the government could release over and above the 100 lt cap fixed, there could be bonus for millers if allocated 12 lt, which officials have agreed. A decision is likely to be taken by the Home Minister, Amit Shah this week, sources said.

The committee of secretaries, headed by the Cabinet Secretary, on Tuesday is believed to have agreed “in principle” to allow about 12 lt of additional sugar export quota to the mills, after considering its possible impact on the domestic market, sources said.

In a letter to the Food Secretary, Aditya Jhunjhunwala, the President of the Indian Sugar Mills Association (ISMA) had conveyed the industry’s demand for releasing additional 10 lt quota for mills, citing better sugarcane availability in the next season (October-September).

Jhunjhunwala said sugar mills had applied for 17 lt of export quota based on the contracts they had already signed, but the government had granted only 8 lt. Industry sources said while mills have around 4 lt of raw sugar lying at factories. A similar quantity has gotten stuck at ports due to export restrictions.

Export restrictions

The country is believed to have already exported 100 lt of sugar since October 1. Exports of sugar (raw, refined, and white sugar) were placed under a restricted category between June 1 and October 31. The Directorate General of Foreign Trade (DGFT) allowed export only through permits and fixed a maximum quantity of 100 lt for the entire season, in a notification issued May 24.

In the first week of June, the Food Ministry allocated 10 lt of quota on a pro-rata basis among those exporters who had applied for the permits. But the mills were allocated 8 lt to sell to these exporters after factoring in the quantity in transit.

Domestic prices

According to Consumer Affairs Ministry data, the all-India average retail price of sugar in the past six months was between ₹40.96 and ₹41.73 per kg. The ISMA President has said that ex-mill prices have not increased and still hover around ₹32-35/kg, despite record export of 86 lt between October and May in the current season.

ISMA has claimed that the opening balance as of October 1 will be enough to meet the demand for two-and-a-half months, and by that time, sugar from the new season will be available. Against an estimated production of 360 lt and 82 lt of carryover stock, the total availability has been seen at 442 lt this season. If 100 lt export and 270-275 lt domestic consumption are deducted from the availability, the surplus will be 67-72 lt.

“About 60 lt is enough to meet the initial requirement next season until new sugar comes to the market. This leaves scope for further release of 7-12 lt for export,” said an official source.

Meanwhile, former food and agriculture minister Sharad Pawar on July 19 met food minister Piyush Goyal and discussed about sugar issues, including export. Goyal will meet Shah to decide on the additional export quota since he handles both commerce and food, the sources said.