Ban on exports jolts state’s sugar industry

The ban, imposed in the middle of the export season, will put on hold over 30% of the total 488,000 tonnes of sanctioned sugar quota for export

MUMBAI: The central government’s decision to ban sugar exports until September 30 has dealt a blow to Maharashtra’s sugar industry, among the top two sugar producers in the country. The decision will also impact the state’s rural economy as well as rural politics.

Ban on exports jolts state’s sugar industry

Maharashtra’s sugar production this year was 1.8 million tonnes more than last year, and the ban, imposed in the middle of the export season, will put on hold over 30% of the total 488,000 tonnes of sanctioned sugar quota for export. It will slow capital liquidity for sugar factories, impacting payments to sugarcane farmers, say experts in the cooperative sugar industry.

Industry experts say the ban, which comes only a month after Union food secretary Sanjeev Chopra ruled out the possibility of such a move, is aimed at bringing sugar prices in the domestic market under control. However, it is unwarranted, they claim. According to officials from the Maharashtra State Cooperative Sugar Factories’ Federation, the central government has permitted 1.58 million tonnes of sugar quota for export. Of this, Maharashtra has a quota of 488,000 tonnes.

Official said the mid-season ban will also put a question mark on the country’s sugar export policy and could affect the industry’s image in international markets.

The export ban has evoked criticism from industry politicians as well. Nationalist Congress Party (SP) president Sharad Pawar called the ban “economically disastrous” for Maharashtra’s sugar industry, which is largely in the co-operative sector. Pawar demanded an immediate reconsideration of the decision to prevent the “financial collapse” of sugar mills.

He argued that the ban will restrict the cash flow required by factories to pay a fair and remunerative price (FRP) to farmers. “The industry was finally seeing a window of liquidity through international markets. By shutting this door, the government is making it impossible for mills to survive and fulfil their legal obligations to sugarcane growers,” said Pawar.

Farmer leader and former MP, Raju Shetti, also slammed the export ban and said. “It is very unfortunate and will affect the sugar economy of the state and country too. Exports provide income and liquidity to factories. What will happen to the agreements for export of sugar,” asked Shetti.

Farmers hurl onions in protest

Amid a crisis of plummeting onion prices, the Maharashtra Kisan Congress staged protests in front of Mantralaya on Thursday, and threw onions at the secretariat’s gate, prompting police to detain protestors. Also, mango and cashew farmers from Konkan have organised a march on Friday, from Girgaon to Varsha, the official residence of the chief minister. They are demanding higher compensation for crop losses this season.