India to allow sugar exports for 2012/13 season

NEW DELHI Mon Oct 15, 2012 3:51pm IST

A Kashmiri worker walks down from the sacks of sugar inside a government godown in Srinagar September 14, 2012. REUTERS/Fayaz Kabli/Files

A Kashmiri worker walks down from the sacks of sugar inside a government godown in Srinagar September 14, 2012.

Credit: Reuters/Fayaz Kabli/Files

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NEW DELHI (Reuters) - India, which is likely to produce a sugar surplus for its third year in a row, has decided to allow exports for another year, Food Minster K.V. Thomas said, reflecting confidence about domestic supplies in the world's top consumer of the sweetener.

Mills and traders will have to wait for a formal order to export sugar in the new season that began on October 1, however. India, also the world's top producer after Brazil, has been exporting for the past two years.

But the country has not been able to sign fresh export deals in the recent past due to rising domestic prices and lower global rates.

The decision to continue with unrestricted exports indicates ample availability, especially during the current festival season when demand peaks, said Mukesh Kuvadia, secretary of the Bombay Sugar Merchants Association.

Output would not fall below 23.0 million to 23.5 million tonnes in the 2012/13 season, Thomas said.

"In terms of availability for the domestic market, I do not see any problem, as we have carryover stocks of 6 million tonnes from the previous season and production will not be less than 23.0 million to 23.5 million tonnes against our consumption of about 22 million tonnes," Thomas said.

The previous year's output was 26 million tonnes.


Cycles in India's sugar output have caused alternate gluts and shortages that force the world's top consumer to export and import almost every three years.

To end the cycle, C. Rangarajan, top economic adviser to Prime Minister Manmohan Singh, has urged freeing up the tightly regulated sugar sector, but the step needs cabinet approval.

The government will act soon on the matter, Thomas said.

"The recommendations of the Rangarajan committee will not meet the fate of the reports of earlier committees. We will soon take a decision on these recommendations," he said.

(Editing by Clarence Fernandez)

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