India must allow 5 Lacs tonnes of sugar exports

India must soon allow 500,000 tonnes of unrestricted sugar exports as bumper output can easily help the world's top consumer ship out 1.5 million tonnes more of the sweetener, industry officials said on Thursday.

India, the world's second-biggest producer behind Brazil, has flip-flopped on the 500,000 tonnes of unrestricted sugar exports, termed Open General Licence (OGL) sales.

In December, a minister said mills could export the permitted quantity. About a month later, the government, under pressure over rising food inflation, referred the issue to a panel of ministers. The panel is yet to take up the issue.

"This is probably the first season ever for the Indian sugar industry when international prices are viable even while there is surplus sugar in the country," said Narendra Murkumbi, president of Indian Sugar Mills Association (ISMA), a producers' body.

He said the country's sugar production might cross 25 million tonnes as output in the first five months of the current season from October rose 19 percent to 16.3 million tonnes.

Trade officials said rising production would help millers meet export commitments of 1 million tonnes against previous sugar imports since 2004.

Murkumbi said permitting more exports would help reduce huge opening stocks for next sugar season which is also poised to be of a year higher output.

Last week, the government had retained sugar output estimate unchanged at 24.5 million tonnes.

India, the world's top sugar consumer, produced 18.8 million tonnes in 2009/10.

Higher supplies from India will ease global prices which rose by about a fifth this year on supply worries from Australia.

On Wednesday, London's May white sugar futures fell $12 (7 pounds) to finish at $751.10 per tonne, while New York's May raw sugar contract shed 0.28 cent to close at 30.42 cents per lb.

Trade and industry bodies have been seeking more quantity for exports under OGL to exploit high global prices and pass on the benefit to cane growers as local prices have fallen about a third in past one year amid improved supply prospects.

As a fallout of falling domestic prices, ISMA Director General Abhinash Verma, said mills' outstanding payments to cane growers rose to 40 billion rupees (550 million pounds) until December 31.

(Writing by Ratnajyoti Dutta; editing by Keiron Henderson)

source: news.stv.tv