Maharashtra: CM Eknath Shinde bats for continuation of OGL policy for sugar exports instead of quota system

The Shinde-Fadnavis government has urged the Centre to continue the open general licensing policy for sugar exports instead of placing sugar exports under the quota regime of either MIEQ (minimum Indicative Export Quota) or MAEQ (Maximum Admissible Export Quota). The Chief Minister Mr Eknath Shinde in a letter to the Prime Minister Mr Narendra Modi said, ‘’The sugar mills in Maharashtra are not comfortable with the idea of placing sugar exports under any controlled regime or quota system and instead prefer sugar exports under OGL system. Quotas tend to unnecessarily create bureaucratic hurdles and translate into grey markets which the Government of India has seriously and rightly been discouraging for the creation of a transparent and fair business opportunity in India.’’

His letter is important as Maharashtra has emerged as the third largest producer in the world after India and Brazil after the completion of sugarcane crushing season for 2021-22. Maharashtra had exported 70 lakh tonnes out of 110 lakh tonnes of the total sugar export of India in 2021-22.

Further, Mr Shinde argued that the quota regime allows mills that have no interest in exports to indulge in transferring their quotas and earning money without any actual exports. ‘’This needs to be avoided as it tends to be disadvantageous for Indian sugar to match international prices,’’ he noted.

According to Mr Shinde, the position of crude oil prices prevailing on the higher side this year (2021-22) were advantageous for Brazil to focus on Ethanol rather than sugar. ‘’It seems that the trend would not continue for the incoming season witnessing the fall in crude oil prices and the decision of the Brazilian government to lower the taxes thereon as a result of which the Ethanol parity has come down as low as 15 cents and therefore Brazil may revise its thought and focus on sugar once again to the disadvantages of India,’’ he said.

Further, Mr Shinde pointed out that the continuation of OGL policy is needed as the window for Indian sugar exports is primarily conducive for a very short period till the end of March during which time the majority of crushing is completed in the country. The seas of Brazil commence from April 1 and this creates competition which in normal circumstances is advantageous to the other export countries and thus creates adverse pressure on Indian sugar exports. Further, the Centre is not required to give any financial assistance for sugar exports and therefore controls of any sort need to be avoided allowing the industry to deal with business as per international pros and cons.

‘’I shall be grateful if you could kindly take up this matter with the Ministry of Commerce and Ministry of Consumer Affairs, Food and Public Distribution for a suitable decision at the earliest as the National Federation of Cooperative Sugar Factories and State level Cooperative Sugar Factories Federation from the important sugar producing states and the private sector sugar factories association from Maharashtra are all on a common platform seeking the continuation of OGL policy,’’ said Mr Shinde.