Govt allows sugar exports of up to 6 mt for 2022-23

New Delhi: The government on Sunday allowed exports of up to 6 million tonne (mt) of sugar on quota basis during the sugar season (SS) 2022-23. A statement from the ministry of consumer affairs, food and public distribution on Sunday said as another measure to balance the price stability of sugar in the country and the financial positions of sugar mills in the country, based on initial estimates of sugarcane production, the government has allowed export of sugar up to 6 mt during the sugar season 2022-23.

The Centre has prioritised availability of about 27.5 mt sugar for domestic consumption, about 5 mt sugar for diversion to ethanol production and to have a closing balance of 6 mt as on September 2023.

The Directorate General of Foreign Trade already notified to extend the inclusion of sugar exports under `Restricted` category up to October 31, 2023. Balance quantity of sugar produced by sugar mills in the country would be allowed for exports.

Since at the beginning of sugar season (SS) 2022-23, initial estimates of sugarcane production are available, it has been decided to allow the export of 6 mt sugar, according to the official statement. The sugarcane production in the country will be reviewed periodically and based on the latest available estimates, quantity of sugar exports to be allowed could be reconsidered, the government said.

In the sugar export policy for SS 2022-23, the government has announced sugar mill-wise export quota for all sugar mills in the country with an objective system based on average production of sugar mills in last three years and average sugar production of the country in last three years.

Further, to expedite the sugar exports and to ensure flexibility to sugar mills in execution of the export quota, mills may decide to surrender the quota partially or fully within 60 days of the date of issue of order or they can swap the export quota with domestic quota within 60 days, according to the statement of ministry of consumer affairs, food and public distribution.

The government said this system would ensure lesser burden on logistics system of the country as swapping system would reduce the need to transport the sugar from distant locations to the ports for exports and movement of sugar across the length and breadth of the country for domestic consumption.Further, swapping would also ensure liquidation of sugar stocks of all mills as mills which are not able to export could swap their export quota with domestic quota of sugar mills which are able to export more, mainly due to their vicinity to ports. At SS 2022-23-end, it is expected that most of sugar mills could sell their production either in domestic or international market via exports and will clear the cane dues of farmers in time, according to the statement.

The government said the sugar export policy is an indication of focus on ensuring price stability in the sector in interest of domestic consumers. By restricting the sugar exports, domestic prices will remain under control and no major inflationary trends will arise in domestic market, it added. The statement said another focus area is production of ethanol in the country, a priority area for the country to reduce dependence on fuel imports and to move towards green energy.

Higher ethanol prices for producers have already encouraged distilleries to divert more sugar towards ethanol. The sugar export policy is another mechanism to ensure availability of sufficient sugarcane/sugar/molasses for ethanol production. Diversion of sugar towards ethanol production during ESY 2022-23 is expected to be 4.5-5 mt.

By allowing sugar exports, the government said it has also protected the interest of cane farmers and sugar mills as mills will be able to take benefits of favourable international sugar price scenario and achieve better prices of sugar so that cane dues of farmers in current sugar season 2022-23 may also be paid timely.During sugar season 2021-22, India exported 11 mt sugar and became the second largest exporter of sugar in the world and earned Rs 40,000 crore worth of foreign exchange for the country. Timely payment and low carrying cost of stocks for sugar mills also resulted in early clearance of cane arrears of farmers, the statement added.