Mills in UP, Punjab, Bihar sell sugar export quota at premium

New Delhi: Sugar mills in states like Uttar Pradesh, which do not have nearby ports to undertake exports, have sold about 5 lakh tonnes of their export quota at premium in the range of Rs 2,500-4,000/tonne amid firm global prices.

The 2022-23 sugar export policy announced on November 5 allowed exports of 6 million tonnes of sweetener on a quota-basis till May 31. Mills were allowed to export themselves or through exporters or swap with domestic sale quota of any other mills. He said, the All India Sugar Trade Association (AISTA) chairman Praful Vithalani said sugar mills located in states like Uttar Pradesh, Punjab, Bihar, Jharkhand, and Chattisgarh do not have nearby ports to undertake exports, and even if they want to export from other ports, the transportation cost is huge.

For instance, the average transportation cost for carrying sugar till ports is about Rs 1,000 per tonne in Maharashtra, Karnataka and Gujarat, which is more than double Rs 2,200 per tonne incurred by mills in Uttar Pradesh, he said. "As a result, mills in states like Uttar Pradesh, Punjab, Bihar and Jharkhand have traded approximately 5 lakh tonnes of their export quota at a premium rate," he said.

Vithalani said mills have sold at a premium in the range of Rs 2,500-4,000 per tonne in view of rise in global sugar prices. Global sugar prices have firmed up after India, the world's largest sugar producer and second biggest exporter, announced its export policy for the 2022-23 season (October-September).

Out of the total export quota of 6 million tonnes, sugar mills have already entered into a contract for shipment of 4.1 million tonnes so far. This includes swapped quantities of 5,00,000 tonnes from the export quota allocated for mills in states like UP, he added. In the 2021-22 season, the country exported 11 million tonnes of sugar.