Food Ministry May Permit Further Sugar Exports on Reviewing Local Production

Until May 31 of the current 2022–23 season, the government has permitted the export of 6 million tonnes of sugar and may consider allowing more exports.

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Food Ministry May Permit Further Sugar Exports on Reviewing Local Production

An export quota of 6 million tonnes has been approved from November 1 through May 31, 2023, according to a statement from the Food Ministry. Millers have the option to export individually, through exporters, or to swap with domestic selling quotas. According to a statement released by the Ministry on October 6, the export quota was established using the country’s preliminary projections of sugarcane production.

“The country’s sugarcane production will be periodically assessed, and depending on the most recent projections, the amount of sugar exports to be permitted may be modified,” the Ministry said. Mills have been urged to quickly export their assigned sugar quota in order to compensate cane producers in advance. The average production of sugar mills over the previous three years and the average production of sugar in the nation over the same period were used to determine the mill-specific sugar export limit for the current season (October–September). Additionally, sugar mills are permitted to relinquish the quota entirely or in part, within 60 days of the date the order was issued, or they can switch the export quota with a domestic quota within 60 days in order to speed up sugar exports and ensure flexibility in the execution of the export quota.

According to the Ministry, “this system would ensure reduced pressure on the country’s logistics system since the swapping system would lessen the need to ship sugar throughout the length and width of the country for domestic consumption and movement of sugar to ports from far-off regions for exports.” Additionally, exchanging would guarantee the liquidation of all mills’ supplies of sugar. It stated that mills that are unable to export could exchange their domestic quota for that of sugar mills that can export more due primarily to their proximity to ports.

At the end of the 2022–2023 period, it is anticipated that the majority of sugar mills will be able to sell their produce through exports on the domestic or global market and will pay the farmers’ cane debts on time.

The Ministry continued, “The policy has thus produced a win-win situation for sugar mills in the country. There will be 27.5 million tonnes of sugar available for domestic consumption in the current 2022–2023 period, while 5 million tonnes will be used to make ethanol, leaving a closing balance of roughly 5 million tonnes.”

Maharashtra and Karnataka began producing sugar for the 2022–23 period in early October; in contrast, it will begin in a week in Uttar Pradesh and the other cane-growing States.

According to the cooperative organisation, National Federation of Cooperative Sugar Factories Limited, mills produced 4.05 lakh tonnes of sugar in October, which was 14.73per cent less than the same month last year. In order to maintain enough supplies for domestic consumption and avoid any increases in retail prices during festival season, the government prohibited sugar exports starting on June 1 in the final months of the 2021–22 season (October–September).

During the entire 2021–22 season, about 11 million tonnes of sugar were exported, the Ministry reported, bringing in about 40,000 crore in foreign money for the nation.

Early clearance of cane arrears by farmers was also a result of prompt payment and the low carrying cost of stocks for sugar mills. Despite a record-breaking purchase of sugarcane totalling more than Rs 1.18 lakh crore as of October 31, it stated that more than 96per cent of farmer cane debts for the 2021–22 season had already been paid. The Ministry claims that until October 2023, sugar exports are under the “restricted” category. By limiting sugar exports, domestic prices will remain in check, and no significant inflationary trends will emerge. The price of sugar in India has already increased by a very small amount, keeping pace with the rise in the fair and lucrative price of sugarcane for farmers. The government has launched numerous important efforts in the sugar sector over the past six years, allowing sugar mills to stand on their own. This season, sugar exports are allowed without subsidy support, and it is anticipated that the mills will function effectively without funding. In the 2021–22 period, there was a record 35.92 million tonne production of sugar. The top three sugar-producing states in the nation are Maharashtra, Uttar Pradesh, and Karnataka.

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