An empowered group of ministers (eGoM) is scheduled to meet on Friday to discuss allowing additional exports of sugar. The government has already allowed exports of one million tonnes of sugar this year in two trances, but industry officials are demanding permission to export another 0.5-1 million tonnes to clear pending stocks ahead of the next crop season starting from this October 1.

The meeting, to be chaired by finance minister Pranab Mukherjee, will consider both the view points of the food and agriculture ministries. Officials say the food ministry is right now not keen to allow an additional 0.5-1 million tonnes of export, saying this could push up domestic prices as demand is expected to rise during the coming festival season.

An eGoM note said the food and consumer affairs ministry has estimated the country’s present stock of sugar at around 6 million tonnes. Almost 5.5 million tonnes of this, the ministry argues, will be consumed before the entry of the new season’s sugar to the market. Hence, the carry-forward stock this year will be just 0.5 million tonnes.

“This could have been sufficient had the stock-holding limits remained in force,” a senior food ministry official said. “But, the stock-holding limit on traders is to end next month. There could be a risk of sudden rise in prices, particularly during the festivals. Hence we have said that any further exports should be allowed only after September.”

India’s sugar production in the current crop year is expected to be around 24.2-24.5 million tonnes (MT), while the production in the next crop season that starts from October is estimated to be around 26-26.5 MT.

Agriculture ministry officials are in favour of allowing the exports of at least 0.5 million tonnes of sugar on the grounds that there would not be any supply shortage during festivals as the crushing season could advance in many parts of the country this year. Usually, sugarcane crushing starts from October 1. Next year, though, the crushing could advance because of early sowing of cane, particularly in Maharashtra.

The officials feel that allowing more sugar exports at this point will help mills clear their cane dues and cut operating losses. The international market, according to millers, is also favourable at this point. “We should get good returns from exports,” said one of them.

Earlier this week, Food minister K V Thomas met agriculture minister Sharad Pawar to deliberate on the issues related to additional export of sugar. A final decision on this is now expected to be taken by the eGoM.

source: BS


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