New Delhi: Government will only consider freeing up sugar exports after obtaining a credible output estimate, the farm minister Sharad Pawar said, which could come at the end of this month, according to trade officials.
The government’s decision is unlikely to be influenced by recent global price swings, these officials added.
Traders are waiting for India, the world’s biggest consumer and the second-biggest producer, to allow unrestricted exports, popularly called sales under Open General Licence (OGL).
“No decision to export sugar under OGL has been taken ... After the actual figure/dependable estimate of production of sugar during the current sugar season become available, the matter will be reviewed,” Sharad Pawar told parliament in a written reply.
Trade and industry officials believe the government may decide on lifting export curbs by end-November when millers start getting an early idea about 2010/11 output.
Government decision to permit exports under OGL would primarily hinge on production, a senior industry official said.
“The recent fall in international sugar prices may not weigh on the government’s decision. In fact, good production trend will be the main factor behind the decision,” said Vinay Kumar, managing director of the National Cooperative Federation of Sugar Factories Ltd.
After falling to a one-month low, benchmark prices in New York rose 0.82 cent to finish at 27.03 cents per lb on Monday and were trading at 26.92 cents per lb on Tuesday.
The country is likely to produce 25.5 million tonnes in 2010/11, according to the Indian Sugar Mills Association, up from 18.8 million tonnes a year ago.
Pawar said last week he would meet officials of sugar firms later this month to assess output trends and would then “apply my mind on sugar exports”.
The minister said his government had already allowed overseas sales of the sweetener to help mills meet an export obligation against imports of raws between 2004/2008.
The government has also permitted exports of imported sugar backed up at ports due to a shortage of railway wagons.
Earlier this month, government officials told Reuters that the country would allow an additional 930,000 tonnes of sugar exports after 15 November, bringing the total since September to 1.5 million tonnes as global supplies remained tight.