EGoM clears additional 5 LT of sugar due to high production

Ahead of the festive season, the government today allowed additional five lakh tonnes of sugar exports and said the decision will not affect the retail prices of the sweetener.

The decision to allow export was taken by the empowered Group of Ministers (EGoM), headed by Finance Minister Pranab Mukherjee, in view of higher output than domestic demand and this would help mills in making payments to sugarcane farmers.

"Empowered Group of Ministers (EGoM) has approved export of 5,00,000 tonne of sugar," a highly placed source said.

"Even after exports, there will be enough stocks to meet the festival demand and the retail prices will remain stable," he said. The retail sugar prices are stable since the last six months at Rs 32-33 per kg.

With today's decision, the government has allowed exports of 1.5 million tonne of sugar in three equal tranches under the Open General Licence (OGL).

Sugar production of India is estimated at 24.2 million tonne in the 2010-11 season against 18.8 million tonne in the previous season. The annual demand is pegged at 21-21.5 million tonne.

The Food Ministry estimates closing stock of sugar at 5.67 million tonne in the 2010-11 season ending September.

"We expect another 1.7 million tonne of sugar from the new season. So there will be sufficient supply," sources said.

Hailing the EGOM's decision, ISMA Director General Abinash Verma told PTI: "The international prices offer a premium of 4-5 per kg over a low domestic ex-mill price".

"The opportunity to export will not only help mills in clearing sugarcane arrears to farmers as well as enabling them to start the next season on time," he added.