The Hindu Business Line : TN sugar mills want ban on exports lifted

Sweet tooth
New capacities are being created in the domestic sugar industry
All export markets are in the vicinity such as Bangladesh, Indonesia and West Asia.

Coimbatore , July 16

With sugarcane output this season anticipated to rise, sugar mills in Tamil Nadu are pitching for lifting the recent ban on white sugar exports imposed by the Centre.

Surplus sugar

The argument of the mills seeking resumption of exports is that India continues to have surplus sugar available for exports, especially to the countries in its vicinity and, therefore, the export route should be kept open if the sugarcane farmers are to be paid by the mills.

"With the sugar output this year expected at 24 million tonnes against the average consumption of 19.5 million tonnes at five per cent annual growth, India still is left with a surplus of 4.5 million tonnes which can be comfortably exported," said Mr M. Manickam, Managing Director of Sakthi Sugars Ltd.

Need for exports

Considering the new capacities being created in the domestic sugar industry, India should start exporting sugar from now and it has to take advantage of its position as a cheap-priced sugar producer and that all its export markets are in the immediate vicinity such as Bangladesh, Indonesia and West Asia.

Mr Manickam is of the view that with the ex-factory sugar price at Rs 17.50 a kg, domestic sugar would remain at this level, although without the remunerative price sugar mills would not be able to pay the cane growers.

Landed cost

However, the landed cost of imported sugar would be dearer at Rs 24 a kg.

Mills will find the export price at $440 (Rs 20,320) per tonne (f.o.b) to be better.

"Sugar production in Tamil Nadu during 2006-07 will be around 22 lakh tonnes and the State's sugar demand is around 8 lakh tonnes.

"So unless export is allowed, it will be difficult for the mills in the State to manage the situation.

"We have represented to the Commerce Ministry seeking restoration of exports", said Mr Manickan, adding that the sugar industry is also for early deregulation and decontrol of sugar industry from statutory sugar release mechanism.

More Stories on : Exports & Imports | Sugar | Industry Associations | Tamil Nadu

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