Govt asks sugar millers to apply for exports

India, the world's top consumer of sugar, has asked millers to apply for exports of the sweetener against imports of raws in the past, trade and government officials said on Thursday.

The move was widely expected since last month, when Indian millers had asked the government to allow such exports to help them meet export obligations.

The food ministry will consider export requests under a scheme that allows duty-free import of raws against a commitment to ship out the same quantity of refined sugar.

The food ministry has allowed 25 percent of the raws imported between 2004 and 2008 for exports by Nov. 30, while the remainder can be sold in overseas market by end-February 2011 under the "ton-to-ton scheme," traders said.

Trade estimate puts mills' export obligation as against raw sugar imports in the past at 967,000 tonnes.

"The government in principle has allowed exports against the previous imports," said a senior official of the food ministry who did not wish to be named.

He did not specify the quantity of the exports.

India, the world's second-biggest producer after Brazil, was a large importer of sugar in the past two years as farmers switched to other crops and a severe drought hit cane output in 2009.

But this year, normal monsoon rains and higher cane planting have raised expectations of surplus production. Domestic stocks have also risen helped by imports.

India's sugar inventory on Aug. 1 was up 21 percent from a year earlier at 7.6 million tonnes, industry sources said.

source: in.reuters