Mills from drought affected areas demand relaxation in sugar export quota

PUNE: It's not only rise in domestic prices that has slowed down exports, but the sugar mills from the drought affected areas have demanded for relaxation in the export quota set for them, which will further reduce India's sugar export quantum in 2015-16.

The union government has fixed a mandatory sugar export quota for all the sugar mills in the country for 2015-16 season, linking it with availing a subsidy of Rs 45/tonne for payment of sugarcane.

BB Thombare, president, Western India Sugar Mills Association ( WISA) said, "We have decided to represent to the central government about making changes in the way the export quota of sugar mills in Marathwada region and Solapur and Ahmednagar districts has been fixed. Instead of keeping it at 12% of the average sugar production of previous three years, it should be based only on production in the current year."

Thombare said that the sugarcane crushing of his own mills has declined from 6.5 lakh tonne last year to 2.5 lakh tonne this year. "Thus the export quota quantity fixed for some mill in drought affected areas based on previous production works out to be about 40% to 50% of their current production," said Thombare.

Mills from drought affected areas have argued that the subsidy amount would had been an incentive, had they achieved their normal sugar production. "With fall in sugar production, the subsidy amount no longer remains an incentive for the mills," said a high level sugar industry official, who did not wish to be identified.