The interministerial committee on foods has recommended an evaluation of the amount of sugar stock available in the country. Based on this evaluation, India may allow sugar mills to export more than 10 million tonnes, the permitted amount of sugar, to help them prevent contract defaults, according to people familiar with the matter.
“The decision could be taken in the next few days,” said an official on the condition of anonymity.
The current quota for sugar exports for this year is 10 million tonnes. However, the government may consider allowing sale of some additional sugar for the year ending September 30.
The government had on May 24 restricted sugar exports to check rising prices and ensure sufficient carry-over stock of 6.2 mt after diversion to ethanol. Carry-over stocks are important to keep prices under check and ensure availability of sugar in the domestic market.
The Indian Sugar Mills Association (ISMA) has written to the food secretary again requesting the government to allow further exports of 1 mt of raw sugar that mills have produced before the cap on exports was announced.
India consumes an average of about 2.3 mt of sugar every month.
Cane crushing in the new season begins in three major sugar producing states – Maharashtra, Karnataka and Uttar Pradesh – in the October-November period.
New sugar comes to the market only by November or December. During this period, the country relies on sugar stocks from the previous year. The consumption also increases during this period on account of the festival season.
India is now the second-largest exporter of sugar in the world after Brazil. As production in Brazil is low, Indian sugar is much in demand in the international market.
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