Govt allows additional export of 5 lakh tonne of sugar

The government today allowed export of additional 5 lakh tonne of sugar under the Open General Licenses (OGL).

"EGoM has approved additional export of five lakh tonne of sugar," Food Minister KV Thomas told PTI after the  meeting of Empowered Group of Ministers.

In April, the government had allowed 5,00,000 tonnes of sugar exports under OGL, which enables shipment without any restrictions. However, the decision on removing stock holding limit on sugar has been deferred.

The EGoM, headed by Finance Minister Pranab Mukherjee, also decided additional allocation of 5 million tonne of foodgrains to APL families, Thomas said.

Pawar, who is one of the key members of the EGoM, was not present at the meeting, as he is in Paris for the G-20 meeting. The industry had sought permission last week to export an additional 1.5 million tonne in view of higher domestic output this year.

Even Pawar had written to Prime Minister Manmohan Singh urging him to allow further export of sugar as India only had a month to cash in on high global prices of the sweetener.

There is a case for more export of sugar, as domestic production is high and global prices are ruling firm at a premium of Rs 500-600 per quintal vis-a-vis domestic sugar prices, he had said.

Sugar production in India, the world's second largest producer and biggest consumer, is estimated at 24.2 million tonnes in the 2010-11 season (October-September), as against 18.8 million tonnes in the previous season.

Food Ministry officials said the additional allocation of five million tonnes of foodgrains will be distributed to 11.5 crore APL families via ration shops till March, 2012.

It will be distributed via PDS to families living above poverty line (APL) in 20 states who are not receiving the existing quota of 15 kg at Rs 8.30/ kg (rice) and Rs 6.10/kg (wheat), they said.

Additional foodgrains will also be allocated to North Eastern states as well as Himachal Pradesh and Uttarakhand, where APL families have not been receiving the current quota of 35 kg.

The government had earlier announced a similar plan for both APL and BPL families, but off-take by state governments has been poor.

Meanwhile, foodgrain stocks with the government rose to all-time high of 65.60 million tonnes as of June 1 due to bumper crop production last year and higher procurement prices.

The sowing of Kharif paddy is on and the crop will be harvested from October, requiring storage space. The country has a total storage capacity of 62 million tonnes.