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Select sugar stocks were in limelight on Thursday after the Government allowed export of five lakh tonnes more under the open general licence (OGL). The decision was taken at a meeting by the Empowered Group of Ministers (EGoM) on Thursday. Stocks such as Andhra Sugars, Dhampur Sugar, Dwarikesh Sugar, Parrys Sugars, Simbhaoli Sugars and Upper Ganges Sugar ended with smart gains.
In April, the Government had allowed five lakh tonnes of sugar under OGL. The industry has asked the Government to consider allowing export of 15 lakh tonnes on expectations of higher output this year.
The sugar market has been abuzz with talk of additional exports and, even, the Centre lifting stock limit on sugar since the beginning of the week. The talk drove sugar prices to three-month high on Thursday in the spot market.
In the futures market, prices have increased Rs 80-90 a quintal this week on bullish sentiment.
Mr Sharad Pawar, Union Minister for Agriculture and a key member of the EGoM, did not attend Thursday's meeting as he was away in Paris for the G-20 meeting. Following representations from sugar industry, Mr Pawar had personally written a letter to the Prime Minister, Dr Manmohan Singh, urging him to raise the sugar export quota.
Strong case
Mr Pawar has noted that there is a strong case for increasing sugar export as domestic production is high and the global prices are ruling at a premium of Rs 500-600 a quintal over domestic prices.
The increase in the sugar export quota comes at a time when the US had augmented its import quota for raw sugar to boost domestic supply and control surging prices.
An additional 1,20,000 short tonnes has been added to the tariff-rate quota for the 2011 fiscal year ending September 30, the US Department of Agriculture said on its Web site.
The quota now totals 1.676 million tonnes, it said.
Sugar output in India, the world's second largest producer and consumer, is estimated at 24.2 million tonnes in the 2010-11 season (October-September), against 18.8 million tonnes in the previous season.
Eluding Consensus
The EGoM, which was headed by the Union Finance Minister, Mr Pranab Mukherjee, could not arrive at a consensus on removing stock holding limit imposed on the traders.
The industry has also demanded the Government to lift the stock limit imposed when the sugar prices had hit a new high.
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