Sugar industry divided over the impact of 10 mt cap on exports

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26 May 2022, New Delhi: The sugar sector appears to be divided over the impact of the Government capping the exports at 10 million tonnes for the current season. 

ISMA welcomes move

Aditya Jhunjhunwala, President, Indian Sugar Mills Association (ISMA), the apex trade body, said the industry welcomed the Government move to cap exports at 10 million tonnes (mt). 

“The sugar industry had requested the Government to allow sugar export of about 9.5 mt in the current season. As per the government notification, sugar export is capped at 10 mt. The expected sugar exports of 9.5-10 mt in the current season would be the highest that the country has achieved so far. This will be beneficial to all stakeholders – cane farmers and sugar industry,” Jhunjhunwala said. 

However, sugar industry players in Maharashtra, who carry out bulk of the exports, are concerned over the government move. “The government decision will have an immediate impact on sugar prices. Already the Maharashtra government is supporting mills to crush extra sugarcane by providing grants. Now, we are not sure what the sugar mills are going to do with huge stocks” said one of the industry payers. 

Sources said till last week over 85 lakh tonnes of export contracts had already been signed and about 71 lakh tonnes of sugar had been physically shipped out till April-end.

Short of expectations

The sugar industry in Maharashtra was looking for more export of sugar from the State, considering the record production this season due to the glut in sugarcane. One of the mill directors said if market prices of sugar come down, the mills will not be able to pay full FRP to farmers.

Vijay Kalantri, Chairman, MVIRDC World Trade Centre Mumbai, said, ”It is welcome that in the interest of domestic availability, the government has introduced mandatory approval process for export of sugar, instead of imposing blanket ban on exports.”

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