Food Ministry in May 2011 issued Export Release Orders for 1.55 lakh tons of Sugar

The Indian Food Ministry in May 2011 issued export release orders for 155816 tons or 1.55 lakh tons of sugar to over 155 mills. The Food Ministry issued export orders to mills for over 1.55 lakh tonnes of sugar as of May 16, 2011, out of the total quantity of five lakh tonnes that it has allowed for outbound shipment.

The Empowered Group of Ministers (EGoM) decided to allow mills to export a small quantity of five lakh tons as the production is estimated to cross domestic consumption after a gap of two seasons.

The release orders were not approved for five mills due to problems in their agreements or applications.

EGoM on Food headed by the Finance Minister, Pranab Mukherjee had on 22 March 2011 allowed mills to export five lakh tons of sugar under Open General Licence (OGL), which does not entail any restrictions. The decision was notified on 19 April 2011. Out of the five lakh tonnes, 51500 tonnes was reserved for neighbouring countries. The remaining quantity was allocated between the mills on the basis of their average production over the last three years.

Sugar mills cannot export their produce without a release order from the Food Ministry.
Sugar production in India — the world’s second largest producer after Brazil is estimated to rise to 24.5 mt in the 2010-11 sugar year from 19 mt in the previous year. The country’s annual demand is pegged at 22 mt.

In the 2008-09 and 2009-10 sugar years, sugar production was below domestic consumption, at 14.53 mt and nearly 19 mt, respectively. The country had to import about six mt to meet the shortfall.