Govt likely to allow export of sugar to EU.

The government may allow export of 10,000 tonne of sugar to the European Union (EU) as the sugar situation in the country has become comfortable with increased supplies and stable prices, an official said.

In February this year, the Centre was forced to revoke its decision to allow export of sugar under the EU’s preferential zero duty quota following protests from the opposition as prices of sugar were still ruling high.

The consumer affairs ministry has asked the commerce department, the nodal ministry which issues orders for exports and imports, to consider its proposal for allowing quota sugar export to the EU. The commerce department wants the empowered group of ministers (EGoM) on food, that is scheduled to meet later this week, to take stock of the sugar situation in the country before taking a final decision on the issue.

“We have no problems in allowing exports as long as all departments are comfortable with it,” a commerce department official told ET.

The EU allows India duty-free exports of 10,000 tonne of sugar annually under its special ‘preferential sugar’ import quota scheme. The opening is very lucrative for Indian sugar exporters as they manage to get attractive prices in the EU market.

This year when the directorate general of foreign trade (DGFT) issued the order for the quota of 2009-10, the Opposition was up in arms as prices of sugar was still ruling high at Rs 43-45 per kg. The government was forced to revoke the export orders owing to sensitivity of the issue.

There has been a marked improvement in the sugar situation in the country as well as globally since then with prices dropping to about Rs 30-32 per kg. Some economists are predicting a global sugar surplus of 2-3 million tonnes this year after a deficit of 8 million tonnes in 2009-10, while India is expected to produce 24-25 million tonnes in 2010-11, from an estimated 18.5 million tonnes in 2009-10.

Source :- economictimes.indiatimes.com