Government of India has directed sugar mills in the country to export speedily to make early payment to farmers.
In a notification issued by Ministry of Consumer Affairs, Food & Public Distribution on November 6, the government stated that at the end of sugar season 2022-23, "it is expected that most of sugar mills will be able to sell their production either in domestic market or in international market through exports and will clear the cane dues of farmers in time."
The statement comes after the Centre allowed export of 6 million tonnes of sugar on quota basis in order to balance the price stability of sugar in the country and the financial positions of sugar mills in the country. The Directorate General of Foreign Trade (DGFT) has already notified to extend the inclusion of sugar exports under ‘Restricted’ category up to October 31, 2023, it added.
As per the food ministry's notification, the government has allocated a uniform export quota of 18.23 percent of the three years' average production of the sweetener in operational sugar seasons.
Sugar mills can export themselves or through exporters or swap with domestic sale quota of any other mills, it 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," the government said.
Further, the ministry noted that sugar mills will have lesser operating cost like storage costs and working capital costs. Also, government's swapping system will ensure "uniform liquidation of sugar stocks of all the mills across the country."
The system, government noted its an "objective system of distribution of export quota among sugar mills."
"The sugar export policy is an indication of focus of Government on ensuring price stability in sugar 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. Indian sugar market has already seen very nominal price increase which is in tune with increase in FRP of sugarcane for farmers," the government noted.
To be sure, India's sugar season runs from October to September. Sugar production in the new 2022-23 season commenced in Maharashtra and Karnataka from October onwards, whereas in Uttar Pradesh and rest of the cane growing states, it will kick off in a week's time.
In October month alone, mills had manufactured 4.05 lakh tonnes of sugar, which was lower by 14.73 per cent from the year-ago period, according to cooperative body National Federation of Cooperative Sugar Factories Ltd.
The government had restricted sugar exports towards the end of the 2021-22 season (October-September) to ensure sufficient stocks for domestic consumption and prevent any rise in retail prices during the festive period.
Despite restrictions, about 11 million tonnes of sugar were exported during the entire 2021-22 season, according to official data.
Sugar production stood at a record 35.92 million tonnes in the 2021-22 season. Maharashtra, Uttar Pradesh and Karnataka are the top three sugar producing states in the country.
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