Thomas rules out change in sugar export policy
New Delhi: The government will continue its existing sugar export policy of allocating the quota among all the mills based on the average production of last three years, Food Minister K V Thomas has said.
However, the Food Ministry has decided to reduce the time limit for undertaking shipments.
The Empowered Group of Ministers had last month allowed an additional one million tonnes of exports. The Food Ministry was mulling change in the policy for expediting shipments.
"After carefully analysing various options, it was felt there was no need to change the existing policy," Food Minister K V Thomas had said yesterday after meeting Finance Minister Pranab Mukherjee regarding this issue.
The mills would be given only 30 days to export sugar and no further extension would be given, he had said, adding that the order would be issued next week.
The decision would be welcomed by the Uttar Pradesh based sugar mills, which were against any change in the policy.
UP millers have not been exporting sugar directly and instead they are selling quota to third party as it is unviable to export from the states which are not near ports.
The sources in the ministry said it would have not made any difference even if the government would have changed the policy because of limited port capacity.
"Our ports do not have capacity to export more than 3-4 lakh tonnes per month," a source said.
Sources said the government decided against any change in the existing policy as the move could have favoured mills based in Maharashtra and not Uttar Pradesh where the cane arrears are maximum at about Rs 5,000 crore.
In 2011-12 marketing year ending September, the government has allowed three million tonnes of sugar exports in three equal tranches in view of higher output than domestic demand.
Sugar production is estimated at 25.2 million tonnes in 2011-12 as against 24.3 million tonnes in previous year. The domestic demand is 22 million tonnes.