Agriculture Industry

Centre rules out reviewing sugar export cap Govt may allow limited volume of raw sugar exports before season ends

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17 June 2022, New Delhi: The Centre is in no mood to review the 10 million tonnes (mt) sugar export cap until the next crushing season starts. However, it could allow a limited quantity of raw sugar additionally, depending on its availability in the current season till September.

In a meeting with the sugar industry on June 15, Food Ministry officials have reportedly been non-committal when representatives sought to know when the government would allow the additional 1 mt as requested as the production next season could be similar to the current one.

Representatives of the industry pointed out that, currently, there are 0.6-0.7 mt of raw sugar available with mills, including some quantity at ports which cannot be processed and sold in the domestic market. Any mill having a refinery will have to spend ₹2-3/kg extra for such raw sugar already procured for export purpose, industry sources said.

Cautiously optimistic

However, the Food Ministry asked millers to submit the details regarding raw sugar lying with mills or at ports to verify the availability. The government is also cautiously optimistic about sugar production during the 2022-23 season (October-September).

As the cane commissioners’ feedback and industry bodies’ production estimates this year turned out to be like “wild guesses”, the government is careful this time and has not made public the next year’s preliminary sugar production estimates even though a meeting with States has already been concluded.

“The initial estimate for this year was 30-31 mt of sugar production and now they are saying 36 mt. How can there be such a huge difference if it is done scientifically?,” wondered an official. No one had expected the way production increased in Maharashtra, making it the country’s top producer again. 

Acreage up

On the other hand, the production in Uttar Pradesh did not increase despite a higher area, mainly due to red rot disease as well as seed replacement of CO-0238 variety, the official said, adding it is very early to assess the output for next season.

According to Agriculture Ministry data, India’s sugarcane acreage this year was up 2 per cent at 46.67 lakh hectares (lh) as of June 2, compared with 45.81 lh in the corresponding period last year. The current cane area coverage has reached 85 per cent of last year’s total acreage (54.97 lh) in entire season.

Indian Sugar Mills Association (ISMA) has said it will release the preliminary forecast for the next sugar season in July, based on satellite images of crop acreage. Still, the industry body has urged the government to put sugar export under the open general licence (OGL) category between October 2022 and April 2023 as there will be a surplus in the 2022-23 season as well. 

In a letter to Commerce and Food Ministry Piyush Goyal, ISMA President Aditya Jhunjhunwala has said the government could allow the export of 8 mt of sugar under OGL between October and April for which suitable announcement in policy should be made now.

“We under stand this is the right time to review the sugar export policy and announce the same for next year as currently global prices are firm and millers will get an opportunity to enter into future contracts at better prices. Accordingly, they can plan their production for next season in advance,” Jhunjhunwala said.

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 the 2020-21 season, from May.

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