Centre increases sugar export quota by 5lakh tonne to stabilize domestic prices

Kolhapur: Centre allowed the export of 5 lakh tonnes of sugar, in addition to the export of 15 lakh tonnes in Nov, which was the start of the crushing season. The increase in the export quota is to ensure the price of sugar remains stable and does not fall, as was recently witnessed.Mills across India subscribed meagrely to the export quota offered in Nov, and only 2 lakh tonne of sugar was exported. The reason was that domestic sugar prices were higher than international prices. As a result, more sugar came into the domestic markets, and prices, which hovered around Rs 44 per kg to Rs 47 per kg, slipped to Rs 36 to Rs 37 per kg.Currently, global market prices for white sugar, which Indian mills mainly produce, are still lower.To ensure sugar prices remain stable, govt, while approving the additional export quota, mandated that sugar mills that signed up for export within 15 days from now must achieve a target of 70% of the allocated quota by the end of June, and the remaining by the end of Sept. A penalty clause has also been prescribed: Mills that failed to achieve the export quota will get less quota in proportion to the quota that remained unutilised.Vijay Autade, a sugar industry expert, said, "The millers made the demand to get the additional export quota, fearing that if domestic prices came down, then they could make up by exporting the sugar. Additionally, Centre's total export allocation is just 7.5% of total sugar produced and, therefore, only price stability is currently the aim. Demand and supply should get balanced, and prices should not drop below Rs 37 or Rs 38 per kg."In the global markets, raw sugar is required. Indian mills produce white sugar, which has demand in Middle Eastern countries, and festivals such as Ramzan may boost the demand for white sugar, experts said. Maharashtra currently leads in sugar production, while the crushing season has reached its tail end. Mills in Maharashtra have, so far, produced 89lakh tonnes of sugar, followed by Uttar Pradesh mills with 66 lakh tonnes and Karnataka with 42 lakh tonnes. The contribution of mills from these top three states in sugar production is 87.50% of the overall production.