Sugar exports up at 1.6 MT so far in 2015-16 season

Sugar production is estimated to decline to about 25 MT in 2015-16 marketing year, from 28.3 MT in the previous year.

The production may drop to 23-24 MT in the next marketing year due to drought in Maharashtra and Karnataka -- the two major sugarcane and sugar producing states.

In order to restrict exports, the Food Ministry has proposed imposing a 25 percent duty on sugar to ensure sufficient supply in the domestic market.

"To keep the export of sugar under control, it is proposed to levy 25 percent customs duty on the export of sugar," Food Minister Ram Vilas Paswan had said last week.

Prices of sugar in the international markets are rising and therefore, traders might increase the export to maximise profits, the minister had said.

The proposed move would ensure sufficient availability of sugar in the domestic market and prices will be under control, Paswan had said.

According to trade sources, sugar exports have become viable now as global prices have increased by about 50 percent in the last three months due to disruption in supply from Brazil.

However, exports would become unviable if customs duty is slapped on sugar shipments.

The government has pegged sugar production at 23-24 MT for 2016-17 marketing year. However, the total availability would be 30-31 MT on the back of opening stocks of over 7 MT.

"... notwithstanding any shortfall in sugar production during 2016-17 sugar season (estimated 23-24 million tonnes), the total availability in India (30-31 MT) would be sufficient to meet the domestic consumption. There is, therefore, likely to be no shortage of domestically produced sugar in India," the Food Ministry had said in late April.

With retail prices crossing the Rs 40 per kg mark, the government has imposed stock holding limit on traders and withdrawn export-linked production subsidy to control prices.