The government may allow up to 2.5 million tonne sugar export under the Open General Licence (OGL) scheme in the 2011-12 marketing year ending in October.

Before sugar export was brought under OGL earlier this month, the government had allowed export of 2 million tonnes of sugar in view of excess production.

With effect from May 11, sugar export has been freed by putting it under OGL with no quantitative restriction on the shipments. However, the Commerce Ministry has asked millers to register the export contracts with it to keep a track on quantity of shipments.

“The Commerce Ministry is looking after sugar exports. It was decided to review exports once its touches two million tonnes. The industry has estimated output at 26 million tonnes and since there has been less lifting of levy sugar, there is scope for allowing additional 5,00,000 tonnes,” said Mr K V Thomas, Union Food Minister.

Levy sugar is the sweetener that the government buys from mills at subsidised rate for supply through ration shops. It is mandatory for mills to sell 10 per cent of their production to the government at lower rate. Levy sugar quota is allocated to states and union territories for supply via ration shops.

The government has pegged sugar production at 25.2 million tonnes in the 2011-12 marketing year as against the annual demand of 22 million tonnes.

Industry body Indian Sugar Mills Association (ISMA) has estimated sugar production at 26 million tonnes for this year as against 24.3 million tonnes in the last year.

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