Government Notifies Capping Of Sugar Exports At 10 Million Tonnes For This Year; Exports To Be Allowed With Special Permission

Amid historically highest exports, the Centre on Wednesday said it has notified capping of sugar exports at 10 million tonnes in the current marketing year ending September to maintain the domestic availability and price stability.

The notification was issued by the Directorate of General of Foreign Trade (DGFT) late at night on May 24.

As per the DGFT notification, sugar exports will be allowed with effect from June 1 till October 31 this year or till further order, whichever is earlier, with specific permission of the Directorate of Sugar under the Food Ministry. 

In the ongoing marketing year (October-September), contracts for export of about 9 million tonnes have been signed, about 8.2 million tonnes of sugar have been dispatched from sugar mills for export and approximately 7.8 million tonnes have been exported. 

According to the Food Ministry, the decision came in the light of record exports of the sugar. Sugar exports in the 2021-22 marketing year are "historically highest". Exports in 2020-21 stood at 7 million tonnes and 5.96 million tonnes in 2019-20. 

"Taking into consideration unprecedented growth in exports of sugar and the need to maintain sufficient stock of sugar in the country as well as to safeguard interests of the common citizens of the country by keeping prices of sugar under check, Government of India has decided to regulate sugar exports w.e.f. June 1, 2022," it said.

Sugar mills and exporters need to take approvals in the form of Export Release Orders (EROs) from the Directorate of Sugar, Department of Food and Public Distribution, the ministry said in a statement. 

The decision will ensure that the closing stock of sugar at the end of September 2022 remains at 6-6.5 million tonnes, which is 2-3 month stocks required for domestic use.

Crushing in the new marketing year starts in the last week of October in Karnataka. For Maharashtra, it begins in the last week of October-November and in November in Uttar Pradesh. So generally, up to November, the supply of sugar takes place from the previous year stock, it added.

For sugar export from June 1 to October 31, Export Release Orders will be issued to exporters on receiving application through a transparent method and these orders would be placed on a website of the Department of Food and Public Distribution, according to a letter written to exporters by the Food Ministry.

The ministry said sugar exports up to May 31 will be allowed. 

Further in the case of exports through bulk or break-bulk vessels, if the shipping bill is filed and vessels have already berthed or arrived and anchored in Indian ports and their rotation number has been allocated as of May 31, such vessels will continue to proceed for the loading and export of sugar without any approval or release order. 

Exporters can apply for EROs through the National Single Window System portal and no request for a change of ERO will be entertained. The validity of EROs issued will be up to the date of Let Export Order (LEO) under the contract agreement or 90 days, whichever is earlier, as per the statement.

Non-implementation of ERO or non-export of sugar under ERO within LEO date will be viewed seriously and such exporters may be penalized under the Essential Commodities (EC) Act 1955 or the Sugar Control order 1966, it added.

"Any breach of the above conditions for export by an exporter, would invite blacklisting of the exporter and would disqualify them from further participation in OGL export besides inviting action under the EC Act and Sugar Control Order," the ministry said.

In a separate letter, the ministry has asked mills to submit online the details of the dispatch of sugar for export on a daily basis. In case of non-submission of these details, the applications for EROs may not be considered.

Sugar mills have to apply for approval for dispatch of sugar for export/deemed exports, it said.

The ministry mentioned that the government has been continuously monitoring the situation in the sugar sector, including production, consumption, export, and price trends in wholesale and retail markets all over the country. 

India has been the highest producer and the second-largest exporter of sugar in the world in the current year. 

"As a result of regular efforts of the Government of India, despite record production of sugar, 99.5 per cent of cane dues for last sugar season 2020-21 have been paid and about 85 per cent of cane dues of current sugar season 2021-22 have also been released to farmers," the statement noted.

The government is committed to maintaining stable prices of sugar in the domestic market, and in the last 12 months, prices of sugar are under control, it said.

Wholesale prices of sugar in India are range-bound between Rs 3,150 - Rs 3,500 per quintal, while retail prices are also within control in the range of Rs 36-44 in different parts of the country, it added.