Govt Gave Sufficient Time to Sugar Exporters & Millers to Apply for EROs

Government of India gave sugar exporters and millers ample time to submit their applications to the National Single Window System (NSWS) regarding the restriction on sugar exports exceeding 100 LMT.

Taking into account the unprecedented growth in sugar exports and the need to maintain sufficient stock of sugar in the country, as well as the need to protect the interests of common citizens by keeping sugar prices under control, the Government of India decided to regulate sugar exports beginning on June 1, 2022, and imposed restrictions on sugar exports exceeding 100 LMT.

Sugar mills and exporters were invited to apply online on the NSWS portal for approvals in the form of Export Release Orders (EROs) from the Directorate of Sugar & Vegetable Oils, Department of Food and Public Distribution (DFPD) via letter dated 24.05.2022.

All sugar exporters and millers have been notified to file online applications in the NSWS portal, which will be open on June 1. Notably, there was enough time to prepare the application and then file it.

Instructions for sugar mills and exporters have been issued and posted on the DFPD website. The applications were processed in a timely manner on a first-come, first-served basis. Since a large number of applications were received from sugar mills/exporters for more than 23 LMT until June 3rd, 2022, and only 10 LMT was to be distributed among sugar mills/exporters, it was decided to distribute a quantity of only 10 LMT on a pro-rata basis among sugar mills/exporters whose applications were received until June 3rd, 2022.

In previous years, whenever export quotas were allocated among sugar mills, they were allocated on a pro-rata basis; thus, this time, in order to maintain transparency and to give the opportunity to all exporters/ sugar mills who applied until June 3rd, 2022, Export Release Orders were issued on a pro-rata basis.

Sugar production in the country has consistently exceeded domestic consumption in recent years, resulting in a surplus situation. To address the country's surplus sugar problem, the Central Government has encouraged sugar mills over the past few sugar seasons to divert surplus sugar to ethanol and has also made it easier for sugar mills to export surplus sugar, improving sugar mill liquidity and allowing them to clear cane price dues of farmers. 

Sugar exports and sugar conversion to ethanol have also contributed to maintaining demand-supply balance and stabilizing domestic sugar prices in recent years. Details on sugar export and sugar diversion to ethanol since the 2018-19 sugar season (October-September) are as follows: (in Lakh Metric Ton-LMT)

India is now the world's largest producer of sugar and the world's second-largest exporter. Furthermore, India is the world's largest consumer of sugar. Sugar consumption in India is steadily increasing at a rate of 2-4 percent per year.

Sugar exports have increased significantly in recent years as a result of timely and proactive policy decisions made by the government. The government has been assisting sugar mills in order to facilitate sugar exports.

However, given that international sugar prices during the current sugar season 2021-22 are higher than during the previous sugar season, the government encouraged sugar mills to export sugar without relying on government assistance. As a result, even if no assistance is provided to sugar mills, exports are expected to reach an all-time high of 100 LMT in the current sugar season 2021-22. At the same time, the government has been closely monitoring the progress of exports in order to prevent any uncontrolled sugar exports and to ensure that sugar is available to domestic consumers at a reasonable price.

The Government determined in the middle of May 2022 that by the end of May 2022, approximately 90 LMT of sugar is likely to be exported; and it was decided by the Government that if restrictions on sugar export to a comfortable limit are not imposed on time, then excess sugar export may occur, resulting in scarcity of sugar in the country and an uncontrolled increase in sugar prices in the months of September-November,2022.

Government of India is committed to maintaining stable sugar prices in the domestic market, and sugar prices have been under control for the past 12 months. Sugar ex-mill prices in India are controlled in the range of Rs 3150- Rs 3500 per quintal, while retail prices are also controlled in the range of Rs 36-44 in various parts of the country.