India should allow 500,000 tonnes of sugar exports

The Indian government should immediately allow 500,000 tonnes of unrestricted sugar exports to help cash in on current high global prices, the chief of a producers' body told Reuters in an interview on Thursday. India, the world's biggest sugar producer behind Brazil, has flip-flopped on unrestricted exports, usually called Open General Licence (OGL) sales, of 500,000 tonnes of sugar.
"It is a rare opportunity for us. Any delay in exports will affect the financial position of sugar mills, impacting their ability to pay good prices to cane growers," Indian Sugar Mills Association Director General Avinash Verma said. Last month, a minister said mills could export 500,000 tonnes of OGL sugar. But the government, bowing to public pressure over food prices, has referred the issue to a panel of ministers.
On Wednesday, New York raw futures shot up to close at the highest level in over three decades, as a massive cyclone hit Australia, one of the world's top sugar exporters, deepening concerns about tight global supplies. Cyclone Yasi may have destroyed half the sugar cane crop in Australia's key growing districts in Queensland, representing about 15 percent of the country's crop, a key industry body said on Thursday.
Verma said India, the world's top consumer of sugar, has a potential to export 1 million tonnes after meeting local demand. "Even if we take into account a government estimate of 24.5 million tonnes, we can easily export 1 million tonne because our consumption will not cross 22 million tonnes," he said.
Verma said the estimate of exportable surplus has excluded 1.2 million tonnes of overseas sales commitment under the Advance Licence Scheme (ALS) against earlier imports when the country faced a supply shortfall. He forecast opening stocks of 5 million tonnes for the country in the new season from October 1 even after overseas sales of the sweetener.
The industry body is sticking to its earlier output estimates of 25.5 million tonnes for the current year to September, up 36 percent from 18.8 million tonnes in the previous year. Verma said domestic markets have sufficient supplies as the sweetener has not been diverted much for alternative uses.