Sugar export curbs: Mills asked to file reports daily

Sugar export curbs: Mills asked to file reports daily

25 May    Finance News

Having notified its plan to regulate sugar exports to keep local supplies steady, the food ministry has asked the sugar mills to seek permits from the directorate of sugar to ship out the sweetener between June 1 and October 31, and file details of despatches with the directorate’s portal daily.

However, re-exports of refined sugar, made from raw sugar imported under the advance authorisation scheme, may not require prior permission, it has said.

In a letter to top executives of sugar mills late Tuesday, the food ministry has also directed them to submit on June 1 a consolidated report on their sugar exports until May 31 this marketing year that started from October 1, 2021. “In case of non-submission of these details by any sugar mill, their application for export release orders may not be considered,” the ministry said in the letter.

In a separate letter to all sugar exporters, the ministry said shipments up to May 31 will be allowed without prior permission. However, between June 1 and October 31, it will be allowed only through export release orders (permits).

“Further, in case of exports through bulk or break-bulk vessels, if the shipping bill is filed and the vessels have already berthed or arrived and anchored in Indian ports and their rotation number has been allocated as of May 31, 2022, such vessel shall continue to proceed for the loading and export of sugar without any approval or release order,” the ministry said in the letter.

Late on Tuesday, the government said it will regulate sugar exports from June and allow only up to 10 million tonne (MT) until October 31, as a precautionary move to keep domestic supplies steady until production from the next season’s crop hits the market. However, exports to the EU and the US through the tariff rate quota (TRQ) or the CXL are kept outside the ambit of the restriction. India has allowed sugar exports of 5,841 tonnes to the EU and 10,475 tonnes to the US under the TRQ and CXL quotas.

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According to the letter, once their applications for export release orders (permits) are approved, mills can’t hold on to the stocks, as they will have to ship out sugar within 30 days.

The quantity approved for exports will be over and above the monthly quota for domestic sales. So, sugar from this monthly quota can’t be diverted for exports.

About 9 MT have been contracted for exports so far this marketing year through September. Of this, about 8.2 MT have been dispatched from sugar mills for exports and a record 7.8 MT have been shipped out.

The restriction was imposed as the government feared unhindered exports could potentially create a shortage in the market and push up prices, especially towards the end of the current year and ahead of the festival season in October-November.

India had shipped out only 6.2 lakh tonnes (LT) in the marketing year 2017-18, 38 LT in 2018-19 and 59.60 LT in 2019-20. Last year, against a target of 60 LT, about 70 LT were exported.

The decision will ensure that the closing stock of sugar at the end of the current marketing year (September 30) remains 60-65 LT, which is enough for 2-3 months’ of consumption (the monthly requirement is about 24 LT in those months).

Cane crushing season starts in the last week of October in Karnataka and Maharashtra and in November in Uttar Pradesh. So, up to November, the supply of sugar typically takes place from the previous year’s stocks.

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