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Govt nod to export of 1.55 lakh tonnes of sugar

Sugar mills cannot export their produce without a release order from the Ministry. An EGoM on Food in March allowed mills to export 5 lakh tonnes of sugar under Open General Licences.

The Food Ministry has issued export orders for over 1.55 lakh tonnes of sugar to mills as of May 16, of the total quantity of 5 lakh tonnes that it has allowed for outbound shipment.

Sugar mills cannot export their produce without a release order from the Food Ministry.

On March 22, an Empowered Group of Ministers (EGoM) on Food headed by Finance Minister Pranab Mukherjee had allowed mills to export 5 lakh tonnes of sugar under Open General Licences (OGL), which do not entail any restrictions.

The decision was notified on April 19. Of the five lakh tonnes, 51,500 tonnes was reserved for neighbouring countries. The remaining quantity was allocated between the mills on the basis of their average production over the last three years.

According to the latest data, the ministry has issued export release orders for 1,55,816 tonnes of sugar to over 155 mills. The release orders were not approved for five mills due to problems in their agreements or applications.

The EGoM had decided to allow mills to export a small quantity of five lakh tonnes as the country's output is estimated to cross domestic consumption after a gap of two seasons. Prior to this, the government had allowed mills to fulfill their export obligation of about one million tonnes.

Sugar production in India - the world's second largest producer after Brazil - is estimated to rise to 24.5 million tonnes in the 2010-11 sugar year (October-September) from 19 million tonnes in the previous year. The country's annual demand is pegged at 22 million tonnes.

In the 2008-09 and 2009-10 sugar years, sugar production was below domestic consumption, at 14.53 million tonnes and nearly 19 million tonnes, respectively. The country had to import about six million tonnes of sugar to meet the shortfall.