Sharad Pawar writes to Manmohan Singh seeking more sugar exports

NEW DELHI: Agriculture minister Sharad Pawar has written to Prime Minister Manmohan Singh urging him to allow further export of sugar, as India has only one month to encash on high global prices, sources said.

In April, the government had allowed 5,00,000 tonnes of exports under Open General Licence (OGL), which means shipment without any restrictions. However, the industry, last week, demanded to allow export of additional 1.5 million tonnes in view of higher domestic output this year.

In the letter, Pawar has noted that there is a case for more export of sugar as domestic production is high and the global prices are ruling firm at a premium of Rs 500-600 per quintal over the domestic sugar prices, sources said.

"The window to export from India will possibly last for a month or so. So, this is the right time to export some of the surplus sugar available in the country," he said.

Stressing the need to take the export decision at appropriate time, the minister said the country has already lost one excellent opportunity to export sugar in January-March 2011, due to delay in allowing export of five lakh tonnes of sugar.

Pawar said, "I am of the considered opinion that we must avail this one opportunity... and allow the surplus available to be exported immediately. Any delay in taking decision would be counter- productive".

Last week, food minister K V Thomas had said no additional exports will be allowed till Diwali, as the demand for the sweetener shoots up during the festive season.

In the letter, Pawar reasoned that additional export of sugar will reduce the burden on sugar mills of the high stocks and improve their cash flows to tide over the ensuring financial crisis and payment to the farmers.

Sugar production in India, the world's second largest producer and biggest consumer, is estimated at 24.2 million tonnes in 2010-11 season (October-September), as against 18.8 million tonnes in the previous season. The annual domestic demand stands at 22-22.5 million tonnes.

Pawar cautioned that "the 2011-12 season is also expected to be a surplus year. This may also lead to serious problem as the coming year may not have viable export option."

India will close the current sugar season with huge stock of 6.5 million tonnes, much more than the norm of three month consumption.

source: ET