India resumes sugar exports

NEW DELHI: After several months of export ban, India has recommenced exports. Around 25000 tonnes have been shipped to Sri Lanka and another 300000 tonnes are understood to be in line for export to Pakistan and Bangladesh.

The exports, however, are expected for the present under the re-export policy for raw sugar imports under the Advanced License Scheme (ALS).

"It would be weird if the government allowed general export of sugar at this juncture when import duty is still at zero. Food price inflation snapped a two-week trend and shot back into double digits to 11.4% in late July. It is too early to be anything but cautious in the optimism over sugar exports opening up."

The development is seen as a "cautious indication" that the government, which ha pegged sugar output for 2010-11 at 23 mt so far against 25m+ by the industry, is of the view that strictures thus far prevailing and imposed at a time of sugar shortage need no longer be applied stringently.

"The government is inclined to take a lenient view against a backdrop of lessening food inflation and projected high supplies. After all, the millers and traders did import at a high price when the country was short of sugar supply," an official said.

He added "There is no need for any special permission from the government since the grain-to-grain scheme for re-export (under the advanced license scheme) of raws prevailing currently." Under this, the same quantity of refined sugar has to be exported as raws imported. Earlier, this was no the case since loss of quantity was factored in for re-export while processing imported raws to whites within the country.

More than 300,000 tons of sugar can be exported under the grain-to-grain program over the few months, traders and millers who have pressuring the Centre to relax export strictures said., contending that local sugar prices have plunged below production price.

On Wednesday, Food and Agriculture Minister Mr Sharad Pawar said in New Delhi that white sugar stuck at ports would be sold abroad, since traders have shown unwillingness to lift at higher cost. Imported sugar to the tune of 5.90 lakh tonnes is lying at Kandla and Mundra ports in Gujarat due to shortage of rail wagons.

Interestingly, although millers have been pressuring the Centre on the contention that sugar price at home is well below production prices, leading to sustained losses to mills, wholesale prices have revived since July 24 when they "cartelised" on ex factory prices. Sugar prices at the Vashi wholesale market rose ont he back of fresh buying from stockists and retailers to meet the ensuing festival demadn.

Medium sugar quality (M-30) reportedly strengthened by Rs 20/50 per quintal to Rs 2,570/2,640 from Thursday's closing level of Rs 2,520/2,620. Meanwhile, Small sugar quality (S-30) also firmed up by Rs 10/25 per quintal to Rs 2,520/2,590, as against Rs 2,510/2,565 pm Thursday.

To boot, the market is expecting good local and upcountry demand in the near future. On Thursday, total arrivals at Vashi market were at 40-42 truckloads (10 tonnes each) and lifting was less at 38-40 truckloads.

source: ET