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Sugar exports capped at 10 million tonnes.
May 25, 2022

Sugar shipments from June 1 only on permits

The government on Tuesday night announced that sugar exports from June 1 would be allowed only through permits and fixed a maximum quantity of 10 million tonnes (mt) for this season (October-September). Seen part of several steps taken in last few days to rein in inflation, sugar will now be under complete government control.

'Export of sugar (raw, refined and white sugar) is placed under restricted category from June 1, 2022 onwards,' the Directorate General of Foreign Trade (DGFT) said in a notification May 24. The Order is valid until October 31, 2022. But, the restrictions would not be applicable on sugar being exported to the EU and the US under CXL and tariff rate quota (TRQ) as these are exported under special provision through permits.

In sugar season 2021-22, about 8.2 mt of the sweetener has been dispatched from sugar mills for export out of which about 7.8 mt have been already shipped, so far whreas a record 9 mt has been contracted. This means the government expects there is no problem of availability in domestic market as another 2.8 mt can go out of the country.

'It is a preventive measure after what has been experienced in cotton. The government does not want to export higher and a situation comes when the country has to import in future. There has to be a balance based on production,' a government official said justifying the curbs.

Sugar mills and exporters need to take approvals in the form of an export Release Order (RO) from Directorate of Sugar in the Ministry of Food and Public Distribution.

The objective of this restriction is to ensure closing stock of sugar at the end of sugar season (on September 30, 2022) remains 6-6.5 mt, which is sufficient to meet domestic demand for 2-3 months-- 2.4 mt/month released for domestic consumption. Crushing in new season starts in last week of October in Karnataka and by first week of November in Maharashtra whereas it is post-Diwali in Uttar Pradesh. Supply of sugar takes place from previous season for at least first two months of the new season.

India had exported 7 mt of sugar in 2020-21 (October-September) as against 0.62 mt in 2017-18, 3.8 mt in 2018-19 and 5.96 mt in 2019-20.

The Centre has been continuously monitoring the situation in the sugar sector, including production, consumption, export as well as price trends in wholesale and retail markets all over the country, officials said. The government control has ensured that 99.5 per cent of cane dues for 2020-21 sugar season got paid and about 85 per cent of cane dues of current season have been released to farmers by mills.

Wholesale prices of sugar in India are range bound between Rs 3,150-3,500 per quintal while retail prices are also within control in the range of Rs 36-44 per kilogram in different parts of the country, official data show.

Acting on the recommendations of the Rangarajan committee, sugar sector de-control programme started during UPA in 2013-14 with abolition of levy system and release order mechanism. Under levy system, mills used to sell 10 per cent of their production to the government at cheaper rates for the subsidised sale programme through ration shops. Release mechanism empowers the government to decide how much quantity each sugar mill can sell in open market every month. While release order mechanism was re-introduced in 2018, the same year a new minimum selling price of sugar was introduced which in effect empowers the government to decide at the minimum price consumers should pay to buy sugar. Only levy system is yet to return.

thehindubusinessline.com

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