India may export another 2 million tonnes of sugar in 2011-12.

NEW DELHI: India could export up to two million tonnes of sugar in the remaining five months of the 2011-12 marketing year ending September, after the government yesterday decided to free outbound shipments of the sweetener, a top industry official said today.

With India having exported 1.6 million tonne so far in 2011-12 marketing year (October- September), the total exports during the period is expected to touch 3.6 million tonnes.

"As per past experience, the country has been exporting 4,00,000 tonnes per month due to logistic issues. Considering the monsoon season, we expect physical export of 1.7-2 million tonnes in the remaining five months," Indian Sugar Mills Association Director General Abinash Verma told PTI.

During the 2010-11 marketing year, physical exports had stood at 3.1 million tonnes.

Asked whether it would be viable for mills from Uttar Pradesh to export as they are far away from ports, Verma said they can ship refined sugar of higher quality that attracts premium in the global market.

Moreover, he said, the UP millers would benefit from the decision as ex-mill prices would not fall as sugar from Maharashtra would now not come to north India.

Yesterday, the government decided to free sugar export by bringing it under open general licence (OGL) to help mills clear cane arrears of over Rs 10,000 crore to farmers. There would be no quantitative restrictions and the government would stop shipments when it touches a particular level.

The Food Ministry had been following a policy of allotting export quota to mills on average output in the last 3 years. The Centre had allowed 2 million tonnes of exports in this marketing year.

The exports of one million tonnes of shipments permitted by the Empowered Group of Ministers (EGoM) on March 26 would also be under the OGL.

India, the world's second largest producer, is estimated to produce 26 million tonnes of sugar in 2011-12 as against 24.3 million tonnes in the previous year. The annual domestic demand is projected at 22 million tonnes.

Source : economictimes.indiatimes.com