Production this year likely to be 24.5 million tonnes, compared to internal demand of 23 MT

The Centre has allowed export of 5 lakh tonnes of sugar. It has asked sugar mills to register themselves for seeking the Release Order for exports under Open General Licence (OGL). They have been allowed to export raw, white and refined sugar, but no export subsidy will be given.

Export only from new output

The OGL export has been allowed only from the output of the new (2010-11) season. A new factory set up in 2010-11 will not be eligible for the export entitlement.

The export has been allowed as sugar production this year is expected to be around 24.5 million tonnes, higher than the internal demand of 23 million tonnes, informed sources said. The output the previous year was 18.8 million tonnes.

Directorate notification

A notification issued by the Directorate of Sugar on Saturday said the Department of Food and Public Distribution allocated the quota of 5 lakh tonnes to factories on the basis of their output in the last three years, or two years' average production in case a factory had not been in operation for one of the three years, or on last year's output in the case of a one year-old mill.

A list distributing the export quota among 661 mills has been notified by the Directorate.

The mills can either export sugar from their own production or source it from other factories to cut transportation cost. The OGL export from this season's output will be over and above the earlier obligation under the Advance Licence/Authorisation Scheme for export of white sugar against imports of raw sugar.

Any export undertaken by a factory shall be “over and above” the monthly release allotments meant for domestic/internal sale. “No part of the monthly release allotments meant for domestic sale can be exported either by the sugar mill itself or by a third party from whom the exports are sourced by another mill and merchant exporter.” Any diversion of the monthly release quota meant for domestic sale will attract blacklisting of the mill and “disqualification from further participation in OGL exports,” besides other action under law.

Allaying apprehensions of price increase in the domestic market as a result of export, official sources said steps would be taken to keep prices under check. Already stockholding limits for bulk consumers and traders were extended till March 31.

India is the second largest producer of sugar, after Brazil, and the biggest consumer of the sweetener in the world.