Mills to export four million tonne sugar in 2015-16

NEW DELHI|PUNE: The food ministry has notified mandatory export of four million tonne of sugar for the 2015-16 sugar season starting October 1. The export quota would be distributed among all sugar mills based on their average production in the past three years.

"In view of the inventory level of the sugar industry and to facilitate achievement of financial liquidity, minimum indicative export quotas are being specified for the sugar season 2015-16. Exports of 40 lakh tonnes of all grades of sugar, raw plantation white and refined have been prorated among sugar factories by taking into account their average sugar production of three years," said the notification.

ET had reported on September 17 that the sugar industry was widely anticipating an announcement on a mandatory export policy from the government to replace the existing export subsidy scheme in the new crushing season from October 1.

The Indian Sugar Mills Association director general Abinash Verma feels this decision would help reduce most of the surplus, which has been depressing domestic sugar prices. "Market sentiments, which are down, should improve with this decision and the ex-mill prices which had fallen by Rs 8 to 10 per kg in the past 14 to 16 months, will see some recovery," he said.




Verma said the decision on exports has been made this time before the start of the 2015-16 season, which gives time to mills to plan their production to cater to the export demand, which in turn will help in timely exports.

However, Narendra Murkumbi, vice-chairman and managing director of Shree Renuka Sugars, said mandatory exports will be tough to implement. "Continuing export subsidy is the right solution to take care the shortterm problem of surplus sugar."

Echoing the industry's demand about cane price, Murkumbi said, "Right now, sugar mills do not have the capacity to do another season. We need help to bridge the gap between the FRP (fair and remunerative price for cane) and what the mills can pay the farmers."