INDIA: Red tape continues to impede exports

Published: 06/25/2012, 7:55:19 AM

Although the government has allowed free sugar export, it has imposed some norms that limit despatches to 25,000 tonnes at one go, much to the chagrin of the industry, according to India's Telegraph newspaper.

A government decision in May brought sugar in the open general licence list - meaning no quantitative restrictions on exports - for the 2011/12 season that runs till September.

Mills were free to export the sweetener under OGL without requiring any release order from the directorate of sugar under the ministry of consumer affairs, food & public distribution. It came as a huge relief for producers given the surplus production in the country and high cane payment arrears to farmers. Earlier, the government permitted exports in tranches, and it asked mills to seek its approval for individual shipments.

However, under the new system, producers are still required to get a registration certificate issued by the Directorate General of Foreign Trade (DGFT).

"Who says that we have total free exports of sugar? Some kind of restriction does exist," sources said.

He said an applicant was permitted export of 25,000 tonnes through the registration certificate. The exporter will have to despatch at least 50% of this quantity before making another application.

Exporters are given 60 days from the date of issuance of a certificate to complete the order.

Industry sources pointed out that the entire process was cumbersome: firstly, fulfiling the 50% target takes time. Second, obtaining a new registration is also time-consuming.

Industry body Indian Sugar Mills Association has requested the government to permit millers to lift the 50% stipulation and allow exports in batches of 5,000 tonnes.

The development comes at a time sugar production in Brazil - the world's largest producer - has not picked up because of delayed rains.

Sources indicated that the industry had been successful in getting better prices in the international market. It is estimated that the cur- rent sugar season could see exports of at least 3.50 million tonnes.

Sugar output is estimated at 26 million tonnes in this season against 24 million tonnes in the previous year. Annual domestic demand is put at around 22 million tonnes.