ISMA seeks permission to export additional 10 LMT of sugar to prevent mills from facing losses

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Indian Sugar Mills Association (ISMA) earlier in June 2022 wrote to the Government seeking additional quantities of 10 LMT for exports of sugar. Once again the industry body has written expressing their concern that sugar mills had applied for 17 LMT of sugar for export however Export Release Order (ERO)s for only 8 LMT were issued. Furthemore, the letter indicated that approximately 6-7 LMT of raw sugar is lying idle at the mills or ports and proving to be unhelpful in building of the closing stock. Mills have no option to convert raw sugar to white sugar or sell it in the domestic market leaving export the only option. For unexported quantities, mills would not only have to face financial losses but also end up in litigation for non-fulfillment of contracts and losses to hedging.

ISMA President Mr. Aditya Jhunjhunwala in the letter also asserted that after record exports of around 86 LMT by India till May 2022, all India average domestic prices have not increased and are hovering around ₹32 to 35/kg which is still below the cost of production of sugar. Therefore, there is no reason to believe that exports of 10 LMT of sugar would affect the domestic market, instead the closing balance would be at comfortable levels that would meet the needs of the country for 2.5 months in the next season starting October 2022. Also due to better cane availability for the next season, availability of new sugar will remain in the market.

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