Govt lifts quantitative ceiling on organic sugar exports

NEW DELHI: In a move expected to help the cash-starved industry, the government has removed the quantitative ceiling on exports of organic sugar.

Earlier, the government had kept a ceiling of 10,000 tonnes on organic sugar exports.

"The quantity ceiling for export of organic sugar has been removed till the time export of sugar is permitted freely," Directorate General of Foreign Trade (DGFT) said in a notification.

However, it said the export of organic sugar would be permitted subject to registration of quantity with DGFT and certification by Agricultural and Processed Food Products Export Development Authority (APEDA).

In a public notice, the DGFT has also permitted export of 8,100 tonnes of raw sugar to the US under tariff rate quota (TRQ) by Indian Sugar Exim Corporation Ltd.

The TRQ is a quota for a volume of exports that enter the US at relatively low tariffs. After the quota is reached, a higher tariff is applied on additional imports from India.

Sugar production of India, the world's second largest sugar producer and biggest consumer, is expected to be at 23.8 million tonnes in 2013-14, as against 25.1 million tonnes last year.

Last month, the Centre had decided to provide additional interest-free loan of up to Rs 4,400 crore to cash-starved sugar industry for paying cane arrears.

The sugar industry has been facing a cash crunch due to higher cost of production and lower selling prices in the wake of surplus output over the past few years.

Currently, sugarcane arrears stand at about Rs 11,000 crore across the country, with the maximum of Rs 7,200 crore in Uttar Pradesh.

Mills are facing a cash crunch as domestic prices have slipped below the cost of production, hurting their profits.