Govt approves sugar exports to benefit from robust global prices

Export concerns of India and Brazil, and the flash floods in Pakistan in July and August contributed to high sugar prices

BY Siddharth Kumar
Delhi

The government on Wednesday allowed sugar mills to export up to 500,000 tonnes of the sweetener this season under the open general licence, which will help the domestic producers to get rich dividends thanks to high international prices.

Announcing the decision, Union Agriculture Minister Sharad Pawar said the permit of shipment will also help sugar producers "in giving good cane prices to the farmers."

Based on predictions of good production, India, the world's second largest producer of sugar, has permitted exports against the pending advance authorisation scheme and the advance licence scheme to take advantage of soaring international prices.

"The details on the export will be finalised within 10 days," Pawar said while addressing 76th annual general meeting of Indian Sugar Mills Association (ISMA), the apex body of sugar producers in the country.

The sugar industry has been seeking exports under the open general licence, or unrestricted exports, to cash in on robust global prices.

"At present, the international market is good for exports of sugars from India. The opportunity for Indian exporters may not remain beyond February 2011, as shortly thereafter the Brazilian sugar production and exports would begin," said Vivek Saraogi, managing director of Balrampur Chini Ltd and president of ISMA.

Due to export concerns of India and Brazil and the flash floods in Pakistan in July and August, sugar prices witnessed a sudden spurt in the global market and reached their highest point in the last 30 years last month.

"Export from India may help to ease out sugar prices in international market," said an agriculture analyst at a Mumbai-based brokerage firm who did not want to be identified. As per ISMA estimates, on-season production of sugar in 2011 will be around 25.5 million tonnes. The country's sugar production in the last marketing year was 18.8 million tonnes.

According to the Australian Bureau of Agricultural and Resource Economics and Sciences, sugar production in India during the current season is likely to be around 27 million tonnes because of increase in cane plantings.

The government has approved a hike in the levy paid to sugar mills to Rs 1,847.05 per quintal, against last year's Rs 1,757.50 per quintal.

http://www.tehelka.com/story_main48.asp?filename=Ws151210COMMODITIES.asp