Sugar Quotas in Export and Domestic Sector to Control Price
·
Sugar
exports under ‘Restricted’ category up to 31st October, 2023.
·
Prioritized
availability of about 275 Lakh Metric Tonnes (LMT)
sugar for domestic consumption, about 50 LMT sugar for diversion to ethanol
production and to have closing balance of about 60 LMT as on 30.09.2023.
·
SS
2021-22, India exported 110 LMT sugar and became second largest exporter of
sugar in the world and earned about Rs. 40,000 crore
of foreign exchange
·
As
on 31.10.2022, more than 96% of cane dues of farmers for SS 2021-22 were
already cleared despite record procurement of sugarcane of more than 1.18 lakh
crore rupees.
·
In
the sugar export policy for SS 2022-23, Government has announced sugar mill
wise export quota for all sugar mills in the country with an objective system
based on average production of sugar mills in last three years and average
sugar production of the country in last 3 years.
·
Mills
may decide to surrender the quota partially or fully within 60 days of the date
of issue of order OR they can swap the export quota with domestic quota within
60 days.
·
For
ethanol production, Diversion of sugar towards ethanol production during ESY
2022-23 is expected to be 45-50 LMT.
·
During
SS 2022-23, sugar mills were not given any subsidy for sugar
production/marketing and even in current season, sugar sector of the country is
expected to perform well with no financial support from Government of India.
As another measure to balance
the price stability of sugar in the country and the financial positions of sugar
mills in the country, based on initial estimates of sugarcane production, Government
of India has allowed export of sugar upto 60 LMT during
the sugar season 2022-23. DGFT has already notified to extend the inclusion of sugar exports under ‘Restricted’ category up to 31st October,
2023.
The
Central Government has prioritized availability of about 275 Lakh Metric Tonnes (LMT) sugar for domestic consumption, about 50 LMT sugar
for diversion to ethanol production and to have closing balance of about 60 LMT
as on 30.09.2023. Balance
quantity of sugar produced by sugar mills in the country would be allowed for exports.
Since at the beginning of sugar season 2022-23, initial estimates of sugarcane production
are available, it has been decided to allow export of 60 LMT sugar. The sugarcane
production in the country will be reviewed periodically and based on the latest
available estimates, quantity of sugar exports to be allowed could be reconsidered.
In
the sugar export policy for SS 2022-23, Government has announced sugar mill wise
export quota for all sugar mills in the country with an objective system based on
average production of sugar mills in last three years and average sugar production
of the country in last 3 years. Further, to expedite the sugar exports and to ensure
flexibility to sugar mills in execution of the export quota, mills may decide to
surrender the quota partially or fully within 60 days of the date of issue of order
OR they can swap the export quota with domestic quota within 60 days. This system would ensure lesser
burden on logistics system of the country as swapping system would reduce the need
to transport the sugar from distant locations to the ports for exports and movement
of sugar across the length and breadth of the country for domestic consumption.
Further, swapping would also ensure liquidation of sugar stocks of all mills as
mills which are not able to export could swap their export quota with domestic quota
of sugar mills which are able to export more, mainly due to their vicinity to ports.
At the end of Sugar Season 2022-23, it is expected that most of sugar mills will
be able to sell their production either in domestic market or in international market
through exports and will clear the cane dues of farmers in time. Thus, the policy
has created a WIN WIN situation for sugar mills in the
country.
The sugar export policy is an
indication of focus of Government on ensuring price stability in sugar sector in
interest of domestic consumers. By restricting the sugar exports, domestic prices
will remain under control and no major inflationary trends will arise in domestic
market. Indian sugar market has already seen very nominal price increase which is
in tune with increase in FRP of sugarcane for farmers.
Another focus area is production
of ethanol in the country which is a priority area for the country to reduce dependence
on fuel imports and to move towards green energy. Higher ethanol prices for producers
have already encouraged distilleries to divert more sugar towards ethanol. The sugar
export policy is another mechanism to ensure availability of sufficient sugarcane/sugar/molasses
for ethanol production. Diversion of sugar towards ethanol
production during ESY 2022-23 is expected to be 45-50 LMT.
By allowing sugar exports, Government
has also protected the interest of cane farmers and sugar mills as mills will be
able to take benefits of favourable international sugar
price scenario and achieve better prices of sugar so that cane dues of farmers in
current sugar season 2022-23 may also be paid timely and working capital costs of
mills may reduce due to optimum level of sugar stocks with them.
In last 6 years, Government
has taken multiple and timely initiatives in sugar sector enabling sugar mills to
stand on their own and become a self-sufficient sector. During
SS 2022-23, sugar mills were not given any subsidy for sugar production/marketing
and even in current season, sugar sector of the country is expected to perform well
with no financial support from Government of India. Facilitating diversion of
sugar to ethanol production and export of surplus sugar as per availability, Government
of India has taken care of interest of about 5 crore sugarcane farmer families as
well as 5 lakh sugar mills workers along with a whole ecosystem of sugar sector
including ethanol distilleries taking them on growth trajectory.