Ahead of the meeting of the committee of secretaries, the sugar industry has sought release of 10 lakh tonnes (lt) of additional export quota to mills and bringing back export under the “free” category from next season starting October 1. A sizeable quantity is likely to be cleared even if the government does not approve the entire 10 lt, sources said.
The committee of secretaries, headed by the Cabinet Secretary, is likely to take a decision this week on the issue after considering its possible impact on the domestic market, the sources said.
In a letter to Food Secretary, Aditya Jhunjhunwala, President of the Indian Sugar Mills Association (ISMA), is believed to have conveyed the industry’s demands citing better sugarcane availability in the next season (October-September) as mills in Maharashtra are likely to start crushing in October itself.
He further said even after a record export of 86 lt between October and May in the current season, the average ex-sugar mill prices have not increased and still hover around ₹32-35/kg, which is below the cost of production. “Therefore, there is no reason to believe that this sugar export of 10 lt in the current season will affect the domestic market,” Jhunjhunwala said.
Average retail price
According to Consumers Affairs Ministry data, the all-India average retail price of sugar was hovering between ₹40.96 and ₹41.73 per kg in the past six months.
The ISMA president said the opening balance as of October 1 will be enough to meet the demand for two-and-a-half months and by that time by sugar from the new season will be available.
Export of sugar (raw, refined and white sugar) was placed under restricted category from June 1 and is valid until October 31, according to a notification issued on May 24 by the Directorate General of Foreign Trade (DGFT). It allowed export only through permits and has fixed a maximum quantity of 100 lt for the entire season.
In the first week of June, the Food Ministry issued a notification allocating 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.
Raw stocks stuck with mills
Jhunjhunwala said sugar mills had applied for 17 lt of export quota based on the contracts they had already signed, but the government granted only for 8 lt. As a result, the 6-7 lt of raw sugar lying with mills got stuck since they plan raw sugar production in advance based on export demand, he pointed out. He has urged the government to consider the industry’s demand keeping in view these stocks which could neither be refined now nor could be shipped out without permits.
According to the Agriculture Ministry data, India’s sugarcane acreage until July 15 this year was 53.31 lakh hectare (lh), a notch below year-ago’s 53.7 lh. Last year’s total acreage was 54.97 lh in the entire season.
The ISMA president has also appealed that 80 lt of sugar should be put under open general licence (OGL) in the next season between October and April. He said this was the right time to review the sugar export policy and announce the same for next year as it will help millers to enter into future contracts and plan their production in advance.
He also said the government could review the export policy after April, based on actual/estimated production and export, while bringing back the Maximum Admissible Export Quota (MAEQ) system, which was last implemented in 2020-21 season.