Sugar mills seek nod for 8 million tonne exports under OGL in next season

Sugar mills seek nod for 8 million tonne exports under OGL in next season

23 Jun    Finance News

Sugar mills have urged the government to allow exports of 8 million tonne (MT) of the sweetener under the open general licence (OGL) in the next season which commences on October 1. This, according to the Indian Sugar Mills Association (Isma), will help the sugar mills enter into future exports contracts well in advance prior to commencement of the season.

Stating that it is time to review the current sugar export policy for next year since the current global prices are firm, a recent communication by Aditya Jhunjhunwala, president, Isma to commerce minister Piyush Goyal said advance exports contracts would result in better cash flows and payment to farmers in the next season.

Sources said the government is still considering the issue of fixing sugar exports volume for the next season.
Isma has also urged the government to allow sugar mills to export an additional 1 MT in the current season so that mills can fulfil their export commitments.
Last month, the government had imposed restrictions on sugar exports from June 1, a move aimed at ensuring domestic availability and curbing price rise. This restriction on exports comes after a record shipment of sugar this season (2021-22).

According to a food ministry statement last month, while the country’s sugar production in 2021-22 season is estimated at 35.5 MT after discounting 3.5 MT used for ethanol production. Out of 9 MT of sugar exports contracted, around 8.2 MT has been shipped. However, Isma has stated sugar mills had applied for additional 1.7 MT of exports, out of which orders were issued for only 800,000 tonne.

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“Almost 600,000-700,000 tonne of raw sugar is surplus and would lie idle with the mills or at ports if it is not exported. The mills now have no option to process it nor sell in the market. Export is the only viable option in the current situation,” Isma has stated.

Stating that there is no possibility of spike in domestic sugar prices, Jhunjhunwala said that despite a record exports of more than 8.6 MT till end of May 2022, the all-India ex-mill average domestic sugar prices have hovered around Rs 33-35 per kg.

Meanwhile, the directorate of sugar and vegetables oils under the food ministry has asked exporters to furnish details about those sugar consignments which were lifted from mills prior to May 31, 2022 and had not been shipped.

In case of those consignments for which export release orders have been issued, exporters have to inform to the food ministry by Thursday. In sugar seasons 2017-18, 2018-19 and 2019-20, about 600,000 tonne, 3.8 MT and 5.9 MT of sugar was exported. The exports stood at 7 MT in 2020-021.

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