Govt relaxes sugar export quota for 2021-22; allows extra 1.2 MT shipments

The government on Friday relaxed the quantitative restriction of 10 million tonnes on sugar exports and allowed shipments of an additional 1.2 million tonnes in the current marketing year ending September.

In late May, the Centre had decided to cap sugar exports at 10 million tonnes in the 2021-22 marketing year (October-September) to maintain domestic availability and price stability.

Sugar mills have already exported nearly 10 million tonnes so far -- an all-time high -- in the current marketing year. The industry has been demanding that the export cap should be enhanced.

On the sidelines of an event here, Food Secretary Sudhanshu Pandey said the government will allow a further 1.2 million tonnes of sugar exports

Later in a statement, the food ministry said sugar mills can now export up to 11.2 million tonnes from the earlier cap of 10 million tonnes as the stock position of sugar since May 2022 has improved due to increase in production and decrease in domestic consumption.

The ministry reviewed the position in the last week of July and decided to increase the export quota for the current marketing year (2021-22).

Even after export of sugar of up to 11.2 million tonnes, closing stock of 6 million tonnes would be maintained, the statement said.

Sugar exports stood at 7 million tonnes in the 2020-21 marketing year, up from 5.96 million tonnes in the previous year.

Moreover, it said sugarcane crushing operations in Maharashtra, Karnataka and other states would commence from 1st to 3rd week of October 2022. Therefore, there would be "sufficient availability of sugar in the country at reasonable price & retail price would likely to remain stable", it noted.

The food ministry said sugar exports have already touched about 10 million tonnes this year so far, adding that this has helped in improving liquidity of sugar mills by Rs 33,000 crore.

Further, export of additional 1.2 million tonnes would help in improving liquidity of sugar mills by Rs 3,600 crore. This will enable mills to clear cane price dues of farmers which stood at around Rs 9,700 crore as on August 4, the ministry stated.

Export of sugar to this extent would also help in earning foreign exchange and help in reducing trade deficit, it added.

Recently, industry body Indian Sugar Mills Association (ISMA) has estimated that India's sugar production could fall slightly to 35.5 million tonnes in the 2022-23 marketing year, starting October, due to the diversion of sugarcane towards ethanol manufacturing.

Sugar output is estimated at 36 million tonnes in the current marketing year ending September.

Before considering diversion towards ethanol, net sugar production is estimated to be higher at 39.99 million tonnes in 2022-23 against 39.4 million tonnes in the current 2021-22 marketing year.

ISMA estimates that the diversion of cane juice and B-molasses to ethanol will reduce sugar production by about 4.5 million tonnes in the next 2022-23 marketing year.

In the current 2021-22 marketing year, about 3.4 million tonnes of diversion has been estimated.

The annual domestic demand is seen at around 27.5 million tonnes in 2022-23, which will leave a surplus of about 8 million tonnes for exports.