NEW DELHI: Sugar exports have not started even after New Delhi gave cane farmers a Rs 1,540-crore financial assistance package, seeking to flush out last year’s surplus stock in the world’s biggest consumer market of the natural sweetener. In March, India had allowed exports of two million tonnes of sugar for the 2017-18 marketing year to clear surplus stocks and improve cash flow to millers for making payment to sugarcane farmers, whose arrears have touched more than Rs 20,000 crore.
India exported 1.75 million tonnes in 2017-18. During April-May 2018, total exports have been 2,40,093 tonnes.
Due to higher sugar production in the current sugar season, domestic sugar prices have remained depressed since the commencement of the season. Sugar output this year is estimated to be 31.9 million tonnes, compared with 20.3 million tonnes in the previous year. India consumes around 25 million tonnes a year.
Traders and exporters said that exports have failed to take off because mills were required to have fulfilled stock limit eligibility conditions, which the government imposed in February.
With more than 40 per cent of the mills not meeting that criterion, they are in a dilemma over starting exports. The trade also said that if Indian sugar exporters quoted a competitive price of $280-290 per tonne compared to the current price quoted at $320 per tonne, more contracts could be signed with traders in Africa, Middle East and other South Asian markets.
Sugar exporters also said that the government could create buffer stock of surplus sugar at 5-6 million tonnes, and through State Trading Corporation, MMTC and PEC, New Delhi could float tenders for exports.
“The condition…of the notification of May 9 has a retrospective application too, especially for any order which was issued prior to 9th May in the 2017-18 season. Maintenance of minimum stocks by mills in Feb-Mar 2018 cannot be complied now since the period is already over,” said Abinash Verma, director-general of the Indian Sugar Mills Association.
Source: Economic Times