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EGoM allows additional 5 lakh tonne of sugar export

24 Jun 2011 Evaluate

An empowered group of ministers (EGoM) has finally given a nod for additional 5 lakh tonne of sugar for exports under the open general license (OGL). It was sustained pressure from agriculture minister Sharad Pawar for allowing sugar exports after a bumper crop this season. Sugar production in the country is estimated at 24.2 million tonne in the 2010-11 season (October-September) against 18.8 million tonne in the previous season. Annual domestic demand for sugar is estimated around 22-22.5 million tonne.

Earlier in April, the government had allowed 5 lakh tonne of sugar exports under Open General Licences (OGL). Due to rising global demand, the world sugar prices are ruling high at a premium of Rs 500-600 per quintal in comparison to domestic sugar prices and that prompted the domestic sugar companies to ask for increasing the sugar export quota to enable the industry take advantage of rising international prices. The decision is aimed at offsetting losses for sugar manufacturers due to surplus stocks.

While, Agriculture Minister, Sharad Pawar has been advocating for increase in sugar export quota, Food and Consumer Affairs, Prof K.V. Thomas, has been saying to be cautious in view of the coming festival season and few days back said that government will not allow more sugar exports till Diwali as it does not want retail prices of the sweetener to rise during the festive season. The demand for sugar is generally higher during the October-November period, when festivals like Diwali are celebrated across the country.

The sugar industry is likely to rejoice with the decision, with the first lot of 5-lt OGL exports set to be exhausted soon, even though it had demanded an additional 15 lt of exports under OGL.

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