Sugar Exporters

Government Will Very Soon Announce Sugar Export Quota For 2022-23 Market Year

Government Will Very Soon Announce Sugar Export Quota For 2022-23 Market Year

Food Secretary, Sudhanshu Pandey said on 21st September’22 that,” the government will very soon announce the export quota of sugar for the next marketing year starting October.” Although he did not disclose the quantity of sugar exports that will be allowed for the 2022-23 marketing year, this was mentioned at a Sugar and Ethanol conference organised by Indian Sugar Mills Association (ISMA) and datagro. India’s Sugar Exports stood at 3.8 million tonnes(MT) in 2018-19, 5.9MT in 2019-20 and 7MT in 2020-21. 

Aditya Jhunjhunwala, ISMA president, said that the sugar production for 2022-23 after the diversion of sugar for the production of ethanol, is estimated at 35.5MT while domestic demand is 27.5MT and he stated that, “ We can export 8 million tonnes of sugar in the 2022-23 marketing year. We have urged the government to announce the export quota and overall policy at the earliest. The export window is till March only after which Brazilian sugar will come into the export market.” 

A letter to the Food and Consumer Affairs Minister, Piyush Goyal, was written by the ISMA in this regard. ISMA said that the net sugar production, without considering the diversion of sugar for production of ethanol, has been estimated and is expected to increase to about 40 MT in 2022-23, from 39.4 MT in the current marketing year. However, 4.5 MT of sugar is expected to get diverted for ethanol in 2022-23 as against 3.5MT in the current year.* 

Government’s Policy On Sugar Exports 

The government imposed restrictions on export of sugar beyond 10MT in May ’22 but later allowed export of another 1.2MT making a total of 11.2MT for the 2021-22 marketing year. 

The policy to be adopted could either be the system prevalent in 2020-21 or under the Open General Licence(OGL) system in 2021-22 season. The Food Secretary said that both the systems have been tested and are successful and no other third system should be applied. In this context, he further added that the export of 8MT of the commodity is very important for the sugar industry.** He also said that the sugar sector has performed very well in the last few years of production, exports and ethanol supply with the help of favourable government policies.

Current Requirement Of The Policy 

Exports of sugar surplus would help in maintaining domestic sugar prices, which in turn would boost the liquidity position of mills enabling them to pay sugarcane farmers on time. However, the president of ISMA demanded that the Minimum Selling Price(MSP) i.e. the rate below which mills can’t sell sugar, should be increased to Rs 35-36 per Kg from Rs 31 per Kg and also sought an increase in the price of ethanol.*** 

The Food Secretary assured the sugar industry that the government will look into their demand related to export quota, MSP and ethanol rates for the next marketing year. The government is urged to announce the policy at the earliest so that mills could enter into future contracts and plan their production in advance. The sugarcane crushing operations of 2022-23 is expected to start from October first week because of huge sugarcane availability.

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