Maharashtra sugar mills compelled to export mandatory quota of sugar

1. Maharashtra sugar mills compelled to export mandatory quota of sugar India’s export performance has dismal. In January, India’s exports fell by 13.6% from the previous year to $21.07 billion. 14thconsecutive month in a row. Oil meal exports are the worst hit with the most drastic decline at 77.5%. Petroleum products shipments also took a hit with a 35.18% drop. The trade ministry had just last month stated that out of the 30 export sectors only 13 managed to grow in the face of tepid global demand and falling commodity prices. Over half of the sectors, in fact, were in the negative zone. The trend the ministry stated is same as other major world economies. There has been a slew of reports in the recent months about the steps the government has been taking to revive India’s exports. From incentives to inverted duty structures, experts have suggested various measures that could boost the nation’s exports. A recent measure that been making the headlines is to do with sugar exports. The Maharashtra government rejected sugar millers’ demand to do away with mandatory export target due to decreased can crop yield. In fact, the state government has made it clear that it will take strict action against those millers who fail to export the defined quota. The state government has warned that sugar mills that fail to confine with this directive cannot lay claim to special incentives offered by the centre and the state such as soft loans with low-interest rate for co-generation and tax exemption on the purchase of sugarcane by mills. This was during a meeting with the cooperative sugar mill owners at the Y B Chavan centre in Mumbai on Monday. "Sugar mills will have to export their quota for the industry to survive. They won't be able to sustain with current prices if they avoid exporting sugar. The dead stock might also adversely affect the sugar prices," Chief Minister Devendra Fadnavis said. The target for sugar exports in the crushing season of 2015-16 is 40 tonnes. Maharashtra alone has to export 14 lakh metric tonnes. As of now the state has only exported 3.80 lakh tonnes. Government officials claim it is crucial for the state to achieve its export target as the state has given assurance to the government. Failure to meet the export target means sugar prices will drop and that is not in the best interests of the farmers. “The emphasis on export of sugar is to ensure the domestic market doesn’t crash. At the same time, the remuneration from the export of sugar would help the sugar mills to sustain and also extend better Fair Price Remuneration to the cane-growing farmers,” Chief Minister Devendra Fadnavis said. Each of the sugar mills has to export 13% of its average three years’ production. Based on the export concessions are given by the centre and state to the sugar sector. This move could push up the local price of sugar by Rs. 2 or 3.

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