Maharashtra sugar mills seek unrestricted OGL for sugar exports

With the wait of announcement of the new export policy for sugar, millers in Maharashtra are seeking a policy which abolishes the MIEQ pattern and OGL is reintroduced. After allowing uncapped free sugar exports under the open general license (OGL) system till 2012 the Government then fell back on the system of Minimum Indicative Export Quota (MIEQ) allocation.

In conversation with ChiniMandi.com a private sugar miller from Maharashtra expressed his views that, “Sugar millers in Maharashtra want to export more than what they have been allocated under MIEQ however they are unable to do so because of the limited quota allocated by the Government. Maharashtra is laying back and falling into more crisis of excessive sugar stocks and cane arrears. On the contrary millers in Uttar Pradesh have paved their way to escape from crisis by channelizing their stock to domestic markets like Bengal, Assam and other bordering parts. Millers in Maharashtra have benefits of having ports nearby and can export sugar in larger quantities. Therefore the Government should abolish the MIEQ pattern for sugar exports and they should introduce a new scheme where the export incentives which should be in similar nature as of 18-19 MIEQ are given to exporters. Exporters while buying sugar pass on the same to sugar miller. Exporters should be allocated quota on a first come first serve basis. A certain funds should be kept aside by govt.” He further mentioned,” Doing this, incentive will any which ways get passed on the mill and eventually farmer because the incentive which Exporter will be entitled to get will get priced into the value of sugar purchased by Exporter.”

Alternatively he added, “If the government wants to get away from MIEQ, they can still do that by increasing the MSP. If MSP is increased to Rs 36/kg and exports for every mill are made compulsory to the amount of 15% of the annual production capacity, millers do not even need subsidy from government.”

Where the whole industry is getting severely hampered by the huge inventories, millers interested in exports are restricted by limited MIEQ quota also. The Government needs to find a way to bring a fine balance between mills and exporters so that maximum sugar in minimum time can be exported by industry which shall help in direct increase of cash flow.

Recently in a sugar conference held in Pune, sugar millers expressed their concerns to bolster sugar exports and that would help them perform better despite lower sugarcane availability in the upcoming season.