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Soaring Sugar Exports Help UP Sugar Mills Receive 10% Premium on Export Quota Sales

    16 November , 2022         Fdiindia

Soaring Sugar Exports Help UP Sugar Mills Receive 10% Premium on Export Quota Sales

Profound returns on sugar exports help sugar mills from Uttar Pradesh to trade their export quota at premiums upwards of about 10% over the prevailing market price for the export of white sugar. According to media reports, up mills have sold 5-6 lakh tones of their export quota at an average price of 4/per kg.

The new sugar export policy allows sugar mills to swap their export quotas with the domestic sales quota of other sugar mills. While some of the exporters have bought the export quota, others require the government to clarify if the policy allows for the trading of export quotas.

According to the traders, as reported by ET, the sugar mills from Uttar Pradesh are interested in indulging in the direct export of refined sugars, which as of now, is selling at about Rs39-40/Kg as against the Rs 37/kg that was quoted for the low-grade white crystal sugar. However, the market conditions after the changes in the guidelines have resulted in sugar mills being more actively interested in selling their quotas at a premium rather than indulging in exports themselves. Thus mills from UP and other regions have booked this premium upon the sugar produce they have not produced yet.

"As the international market is good, it is accepted that the one who sells the export quota will ask for share in the profits that the exporter will make," said a leading sugar miller from Uttar Pradesh.

The newer guidelines were supposed to tighten the bridle upon the exporters who would, after it, only be allowed to export quota quantity allocated to sugar mills. No exporter or refinery under any circumstances would be allowed to buy sugar from the open market to export.

Some of the most prominent importers countries of Indian sugar in the global arena are

United States – 510.87 INR Billion

United Arab Emirates – 183.70

Netherlands - 133.18

Singapore - 119.78

South Africa – 86.94

China- 84.18

Saudi Arabia – 83.88

Hong Kong – 72.05

Germany – 64.03

Brazil – 61.85

France - 56.52

Nigeria – 55.64

Nepal - 51.69

Belgium – 51.61

Italy - 50.76

Indonesia – 46.22

Japan – 41.70

Thailand – 41.54

According to the new guidelines, the stipulated rules and regulations were supposed to bring stability in the market, where attempts to export more than necessary for the increased revenue would be curbed. the guidelines were also supposed to forth a restriction upon the reselling and exporting of local sugar production. The new guidelines had also detailed how the smaller mills can form a bi-partite or Tri partite system for a more systematic approach to exporting the stipulated amount of goods. The aim of these guidelines was quite different than what has been achieved; the government seemingly would clear its details upon selling quotas. The selling of quotas would help some of the most prominent and big exporters while driving out the small-time exporters out of the market. This procedure could hamper the market and settle monopolies in the long run.

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