Sugar mills will be able to export an additional 10 lakh tonnes in 2011-12 under open general licence (OGL). An Empowered Group of Ministers (EGoM) has approved the proposal.

The approval comes at a time when sugar mills are burdened with cane arrears. According to an estimate, cane arrears touched Rs 8,409 crore on February 29, 2012. Mills are now estimated to make a profit of Rs 2.5-3 a kg on exports, which will help them pay arrears to the farmers.

With this approval, total sugar exports will touch 30 lakh tonnes. The Government believes that higher exports are unlikely to affect domestic prices, as there is enough surplus.

Based on the inputs from Cane Commissioners of sugar-producing States, the Food Ministry recently revised upward the sugar production estimates to about 25.2 million tonnes, from the earlier projection of 24.6 million tonnes for marketing year 2011-12.

However, the industry has pegged sugar output at 26 million tonnes in 2011-12, against 24.3 million tonnes in the previous year.

The annual domestic demand is projected at 22 million tonnes. Sugar mills exported 2.6 million tonnes in the previous marketing year.

Stocks of sugar mills dipped today on the bourses. Balrampur Chini lost 2.63 per cent from Friday's closing while Shree Renuka Sugar ended with 7.31 per cent loss, Bajaj Hindustan with 0.96 per cent and Dhampur Sugar ended with 0.81 per cent loss.

> Shishir.s@thehindu.co.in