Government gives relief to sugar companies, gives permission to export

The central government has allowed the export of 10 lakh tonnes of sugar for the 2024-25 season ending in September. Its aim is to stabilize domestic prices and provide support to the sugar industry.

Announcing the decision on social media, Food Minister Pralhad Joshi said that this measure will benefit five crore farmer families and 5,00,000 workers and will also strengthen the sugar sector.

Joshi said that this will improve the cash position of sugar mills, ensure timely payment of sugarcane dues, as well as balance availability and prices for consumers.

The order of the Food Ministry allows export of all grades of sugar within the allocated quantity. New mills starting production in the year 2024-25 and mills resuming operations after closure have also got export quota.

Sugar mills can export directly or through merchant exporters till September 30. They have the option to surrender the quota by March 31 or exchange it with domestic quota to reduce transportation costs.

The policy allows sugar mills to swap export quotas with domestic monthly release quantities through mutual agreements, subject to approval of the Food Ministry.

Sugar exports under the advance authorization scheme will continue under existing provisions.

The decision comes at a time when local sugar prices have fallen to an 18-month low, putting pressure on mills' margins. India's sugar production is estimated to decline to 27 million tonnes in 2024-25 from 32 million tonnes last year, lower than the domestic consumption requirement of over 29 million tonnes.

According to the National Association of Cooperative Sugar Factories, the country's sugar production stood at 1 crore 30.6 lakh tonnes till January 15, down 13.66 per cent year-on-year due to lower yields in major producing states Maharashtra, Karnataka and Uttar Pradesh.

The country had completely banned exports in the last 2023-24 season due to domestic supply concerns. The Indian Sugar and Bio-Energy Producers Association (ISBMA) has welcomed this decision.

ISBMA Director General Deepak Ballani said in a statement, "This decision provides significant relief to sugar mills, which will help them generate significant revenue, which will contribute to timely cane payments to farmers.