More sugar export could be allowed after assessing domestic production: Food Ministry

Mills have been asked to export allocated sugar quota speedily to make early payment to cane farmers, it said.

Mill-wise sugar export quota has been fixed for the current season (October-September) based on average production of sugar mills in last three years and average sugar production in the country in the same period, it said.

Further, to expedite sugar exports and to ensure flexibility to sugar mills in execution of the export quota, mills are allowed 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.

"This system would ensure lesser burden on the logistics system of the country as the 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 ministry said.

Further, swapping would also ensure liquidation of sugar stocks of all mills. 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, it said.

At the end of 2022-23 season, it is expected that most 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.

"Thus, the policy has created a win-win situation for sugar mills in the country," the ministry added.

In the ongoing 2022-23 season, the ministry said sugar availability for domestic consumption would be 27.5 million tonne, while 5 million tonne of sugar would go for ethanol making and the closing balance would be about 5 million tonne at end of the season.

The sugar production in 2022-23 season has already commenced in Maharashtra and Karnataka from October onwards, whereas in Uttar Pradesh and rest of the cane growing states it would kick off in a week's time.

In October alone, mills had manufactured 4.05 lakh tonne 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) from June 1 to ensure sufficient stocks for domestic consumption and prevent any rise in retail prices during festival period.

About 11 million tonne of sugar was exported during the entire 2021-22 season and earned Rs 40,000 crore worth of foreign exchange for the country, the ministry said.

Timely payment and low carrying cost of stocks for sugar mills also resulted in early clearance of cane arrears of farmers.

As on October 31, more than 96 per cent of cane dues of farmers for 2021-22 season were already cleared despite record procurement of sugarcane of more than Rs 1.18 lakh crore, it said.

According to the ministry, sugar exports are under the "restricted" category till October 2023. By restricting the sugar exports, domestic prices will remain under control and no major inflationary trends will arise in the domestic market.

The Indian sugar market has already seen very nominal price increase which is in tune with increase in fair and remunerative price of sugarcane for farmers.

In the last six years, the government has taken multiple and timely initiatives in sugar sector enabling sugar mills to stand on their own.

The export of sugar has been permitted without subsidy support this season and it is expected the mills will perform well without financial support.

Sugar production stood at record 35.92 million tonne in 2021-22 season. Maharashtra, Uttar Pradesh and Karnataka are the top three sugar producing states in the country.