The indian government discussed sugar prices and domestic sugar stocks today. The panel chaired by Finance Minister Pranab Mukherjee discused the topic which was scheduled on the agenda for today’s meeting but did not reach a decision due to the absence of Sharad Pawar the Minister for Agriculture, Anand Sharma the Commerce Minister and K.V. Thomas the Food Minister.
Indian exports have not been banned but sugar shipments have had restrictions placed discouraging exports to protect domestic sugar supply in the wake of rising agflation. Sugar currently sells at Rs 32-35 per kg retail. Prices have been relatively stable for past few months due to higher production.
Sugar production is expected to be 24.5 million tonnes during the 2010/11 season which started in October and runs through to July. Production is up from 19 million tonnes last year. Domestic consumption is approximately 22 million tonnes.
The Sugar Mills Association has suggested that one million tonnes of sugar should be permitted for export under OGL due to this being surplus to India’s domestic consumption.
A further meeting of the panel is expected in the next few weeks. The sugar market awaits the decision in an indication that supply will ease.