India has issued a formal order allowing exports of 1.0 million metric tons of sugar for which a ministerial panel had given permission last month, a statement on the Ministry of Food's website showed.

Mills exporting from their own output would have to submit their applications within 30 days, while those opting to export after sourcing sugar from others would need to apply within 45 days, the statement said.

India allowed the exports as it is expecting a sugar surplus of between 3.0 million and 4.0 million tons. The fresh exports will be in addition to the 2.6 million tons of shipments allowed in the last marketing year ended Sept. 30.

The formal export order will bring relief to local mills as any further delay could have made shipments from India nonviable as international prices are softening.

International prices have fallen since Sept. 22 when the government in the world's second-largest sugar producer after Brazil allowed shipments.

"It is viable to export at these [current] prices. We will be able to ship out the entire quantity of 1.0 million tons that have been allowed," said Vinay Kumar, managing director of the National Federation of Cooperative Sugar Factories.

He said at current prices, mills will get a 2,000 rupees($39)-a-ton margin.

The government's decision to allow fresh exports had helped break an impasse over cane crushing in some key producing regions after farmers wanted better payment for their cane, while mills were reluctant to do so because domestic prices of sugar weren't rising so much because of excess supplies.

Mr. Kumar said crushing operations had begun in full swing.

Indian mills have produced 2.16 million tons of sugar since the marketing year began Oct. 1, up 17% from 1.84 million tons during the same period a year earlier, the Indian Sugar Mills Association said in a statement.

As of Nov. 30, as many as 350 mills have started operations, compared with 355 mills a year earlier, the statement said.

The Indian sugar industry has been lobbying for exports of up to 4.0 million tons during the year, but the government is likely to allow shipments in small batches only to prevent prices from flaring up in the local market.

source: online.wsj

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