The Centre has approved the exchange of 2.14 lakh tonnes (lt) of sugar export afresh between mills and has adjusted them with the domestic quota, taking the total quantity to over 4.5 lt, so far.

The Food Ministry allowed the exchange of quota on November 28 for the 2.14 lt as sought by 17 sugar mills, though these mills were together allotted over 2.88 lt. While some mills — mostly with permits less than 5,000 tonnes — have been selling the entire export quota at one go, those with higher allocation have been exchanging in tranches, official sources said.

The Food Ministry earlier approved the exchange of 2.38 lt of quota. Many mills in Bihar and Uttar Pradesh have entered into contracts with units in Maharashtra, which enjoy an advantage due to their proximity to ports on the west coast, officials said.

The Centre on November 5 permitted exports of 60 lt of sugar by May 31, 2023. The Food Ministry allowed the shipments by allocating export quota to each sugar mill and also made the allotted quantity exchangeable between mills.

As per the guidelines of the government, any mill which wants to surrender the export quota will have to do so before January 4 and the quota will be adjusted with domestic sale quantity allotted every month.

For instance, if a mill in UP surrenders certain quantity of export quota by exchanging it with a mill in Maharashtra, the UP mill will have to sell similar quantity in domestic market and its domestic quota will be accordingly enhanced, but the same quantity will be reduced from the domestic quota of the Maharashtra mill.

According to the notification, all sugar mills allocated a uniform 18.23 per cent of their last three operational years’ average production. The government expects the country’s sugar production to be about 36.5 mt, as estimated by the Indian Sugar Mills Association (ISMA) for the current season (October 2022-September 2023). The latest update from ISMA shows that sugar production in the first 45 days of the current season was a tad lower at 1.99 mt, against 2.08 mt during the same period a year ago.