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    HomeBusinessThe curious case of sugar export quota: Why APEDA was left out?

    The curious case of sugar export quota: Why APEDA was left out?

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    Agri Business

    Mills, exporters wonder why Food Ministry is issuing the shipment release order

    Amid allegations of not following specific norms and whimsically fixing a cut-off date, the Food Ministry has issued a statement defending the entire process of issuing export release orders (EROs) worth 10 lakh tonnes (lt) early this week. The statement came a few hours after a release issued by a sugar industry body seeking additional EROs of another 10 lt .

    In view of the increase in estimated sugar production to 360 lt from the earlier assessment of 350 lt, the government should allow sugar mills to export another 10 lt of in the current season to September, Aditya Jhunjhunwala, President of Indian Sugar Mills Association (ISMA), said June 8. This will leave ample opening balance of sugar stocks for 2.5 months of sugar consumption, he added.

    Opportunity for all

    According to the National Federation of Cooperative Sugar Factories (NFCSF), former agriculture and food minister Sharad Pawar has also written to Prime Minister Narendra Modi seeking a raise in the cap on sugar exports by 10 lt.

    The ministry statement said: “In past few years also, whenever export quota was allocated among ‘sugar mills’ it was allocated to ‘sugar mills’ on pro-rata basis; therefore, this time also in order to maintain transparency and to give the opportunity to all ‘exporters/ sugar mills’ who have applied till June 3, Export Release Orders were issued on pro-rata basis.”

    According to the statement, sugar mills were issued the export quota in the past whereas exporters/sugar mills got the quota this time. Sugar being an essential commodity under the Essential Commodities Act, the Food Ministry is the administrative body for its overall control.

    No deadline in norms

    Many millers and industry officials, requesting not to be named, said it should have been left to agri export body APEDA or Directorate General of Foreign Trade (DGFT) to decide the quota after fixing the total volume if the quota was to be handed out to exporters. Secondly, if the Food Ministry is concerned about mills, the quota should have been fixed mill-wise with a freedom to sell those to exporters.

    Besides, the Food Ministry’s decision to fix the cut-off date as June 3 has also been questioned. “Since a large number of applications were received from sugar mills/exporters for the quantity of more than 23 lt till June 3, and as the quantity of only 10 lt was to be distributed among sugar mills/exporters, it was decided to distribute a quantity of only 10 lt on pro-rata basis among sugar mills/exporters whose applications were received till June 3,” the ministry statement said.

    “The May 24 notification of the Food Ministry prescribing guidelines for EROs does not say applications should be submitted by June 3, nor there was mention of the first-come-first-serve rule. Either the application should have been stopped at 10 lt or at least a notice to all with a cut-off date to receive the applications should have been issued. We don’t understand the reason to stop applications at 23 lt and not 22 lt or more,” a sugar mill owner in Uttar Pradesh said.

    Published on June 09, 2022

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