The government took the decision to allow export of five lakh tonnes of sugar following representation by sugar-producing states and cooperative societies.
Minister of State for Consumer Affairs, Food and Public Distribution, K.V. Thomas on Monday said the government’s decision to allow export of five lakh tonnes of sugar last week has led to an increase of Rs. 4 per kg in the sweetener’s retail price.
Readers may be aware that Sharad Pawar and Maharashtra Chief Minister Prithvi Raj Chavan have strongly advocated the case of allowing more sugar export.
“That’s why we did not (initially) agree for exports”, he said at a conference on Negotiable Warehouse Receipts System in Bangalore.
“This we had apprehended earlier (that the move will lead to increase in the retail price of sugar),” he added.
The Minister said the government took the decision to allow export of five lakh tonnes of sugar following representation by sugar-producing states and cooperative societies.
“I am not resisting exports”, Mr. Thomas stressed, adding that, “My concern is with the consumers.”
The international sugar prices are hovering higher than the domestic prices.
While domestic prices are pegged in the range of Rs 2,500-2,600 per quintal, the international prices are calculated in Indian currency at around Rs 2,800 per quintal giving a premium of around Rs 200 per quintal.
The price rise in domestic market is believed to boost farmers’ sentiment for sugarcane cultivation.
“The sugar prices had touched a bottom of Rs 2,400 per quintal as exports were capped till now. Lower prices would result in reduced realization for farmers. This would make them shift to another crop. So it was necessary to keep farmers stay interested in cane farming.
Earlier, farmers’ realisation was feared to be as low as Rs 1,900 to Rs 2,200 per tonne of sugarcane against Rs 2,400 to Rs 2,500 per tonne given last year. The sugar acreage in the state has remained stable at around 200,000 hectares, with nearly 300,000 farmers associated with it.
Meanwhile, the industry is still demanding more exports of sugar. “After allowing exports of 500,000 tonnes of sugar, the total export permit so far has reached to one million tonnes. But the demand for total sugar exports is two million tonnes by the end of the current season.
Against the total estimated sugar production of about 24.4 million tonnes for the year 2010-11 (October-September) the domestic demand is believed to be around 22-22.5 million tonnes.