Agri Business

An additional 1 mt can be shipped after a similar volume was released as quota to 62 exporters on June 5

It has now emerged that only 8.07 million tonnes (mt) of sugar have been exported until June 5, the date on which the government issued the export release orders (EROs) worth 1 mt. This will potentially help India to ship nearly 1 mt additionally amid a surge in global demand for the Indian commodity.

“The export of Indian manufactured sugar (raw, white and refined) totals 8.07 mt as on June 6 in the current season (October-September) against the cap of 10 mt,” a source in the sugar trade said. Probably, due to this, the Indian Sugar Mills Association (ISMA) has demanded 1 mt additional EROs be issued.

Port-based refinery exports

Out of the total quantity exported, Indonesia, Bangladesh and Saudi Arabia have emerged as the top three buyers with a share of over 45 per cent. Other major destinations include Afghanistan and Somalia. There is no clarity if about 1.77 mt exported by port-based refineries also include some quantities processed from domestically produced raw sugar or if the entire volume has been shipped under advance license scheme (ALS) as it is imported duty-free.

However, some traders said exports until June 6 were 9.42 mt including the 1.34 mt of raw sugar sourced by port-based refiners from Indian mills.

“The government could not have issued 1 mt EROs had the shipments reached 9.42 mt as the cap is fixed at 10 mt for the entire season. It seems there is some issue with compilation as 1.34 mt of the raw sugar have been calculated twice, first as export volume as raw and later as refined variety,” the source said, adding the government is also aware of the source of this compiled data.

“Either all EROs should stop until a clear picture emerges on the likely production and actual exported volume or the government has to allow more export based on the assumed data, which has been the case in sugar and many other commodities,” said an industry expert.

EROs by hand, email

Even as the government has been tight-lipped about the next course of action, it is learnt that some millers/exporters have approached the Food Ministry to consider their request for EROs submitted by hand and via email to the Food Ministry due to technical glitch in the portal where it was to be submitted. “Since the guidelines had provision for an email application, the government should be liberal, particularly after increased estimate of production,” an exporter said.

ISMA, this week, revised its all-India sugar production estimate for the 2021-22 sugar season to 36 mt after considering the diversion of 3.4 mt of sugar equivalent into ethanol. The industry body also said as per its estimates and reports from the mills, sugar sales by the end of April 2022 have been at 16 mt against 15.26 mt in the corresponding period a year ago, up by about 0.75 mt.

Even the domestic sugar sales quota released by the government up to June 2022 is higher by 0.55 mt than the year-ago period. ISMA estimates domestic sugar consumption in the current season at 27.5 mt, up from 26.56 mt last year. The closing stock as of September 30, 2022, is likely to be 6.7 mt, which is sufficient for three months of domestic consumption, ISMA said.

Aditya Jhunjhunwala, ISMA President, earlier said the government should allow the industry to export another 1 mt in the current season. This will leave ample balance of stocks for 2.5 months of sugar consumption. He said release orders were issued only for 0.8 mt in the June 6 notification of EROs for the sugar mills out of applications worth 1.7 mt.

Published on June 10, 2022