Pawar urges PM Modi to raise sugar export quota by another million tonnes

Production of the sweetener is expected to be higher than earlier estimates

Days after the Central government imposed a cap on sugar exports at 10 million tonnes, NCP chief and former union agriculture Minister Sharad Pawar has written a letter to Prime Minister Narendra Modi to relax the cap on overseas shipments by a million tonnes as production is expected to be higher than earlier estimates.

In a related development, the National Federation of Cooperative Sugar Factories (NFCSF), the apex body of cooperative sugar mills in the country, in a statement issued today complained against the alleged unfair treatment meted out to the sugar cooperatives while allocating export quotas post the ban imposed late last month.

The cooperatives which have a share of around 45 per cent in the total sugar production of the country said that though almost 41 per cent of the total sugar exported in the last three seasons (i.e. 2019-20, 2020-21 and 2021-22 seasons) has come from the cooperative sector, they have been allocated just around 47 per cent of fresh export release orders post the ban, which is unfair.

Demanding a relaxation in the export quota to allow another 1 million tonnes of export, the cooperatives said unless that is permitted they will be left with huge unsold inventory.

The cooperative sugar sector which is dominant in Maharashtra, Gujarat and Karnataka has a very meagre share in the total unpaid cane dues for 2021-22 season estimated to be around Rs 17,000 crore till a few days back.

“With the Government of India’s interventions of capping current years’ sugar export, the export release orders issued to Cooperative is barely 47 per cent which in our opinion is not in tune with performers vis-a-vis non performers. Balance 53 per cent raw sugar remaining without Export Release Orders (ERO) will cause heavy financial loss if not permitted for exports as there is no local market for this stock which tends to deteriorate during storage “Jaiprakash Dandegaonkar, President of National Federation of Cooperative Sugar Factories which represents 258 cooperative sugar mills and nine Cooperative sugar federations across India said in a statement.

Prakash Naiknavare, Managing Director of NFCSF said that even if additional exports of 1 million tonnes if allowed over the quota of 10 million tonnes, India will be left with closing stocks of 6 million tonnes by September 2022 as production has risen to 36 million tonnes as against the earlier estimated 35 million tonnes.

“We have already entered into contracts for export of 9.5 million of the permitted 10 million tonnes of export and now if another 1 million tonnes is permitted it will help in clearing all the already produced raw sugar for exports by the cooperatives,” Naiknavare told Business Standard.

Pawar, meanwhile in the letter, also demanded continuation of sugar export under Open General License in the new marketing year starting October 2022, India is the world's largest sugar producing nation and second biggest exporter.