NEW DELHI: India has issued a formal order for 1 million tonnes of sugar exports under open general licence (OGL), a government statement showed on Monday, nearly a fortnight after the world's top sugar consumer allowed such sales as output was seen exceeding demand.
India, the world's top sugar producer after Brazil, is seen producing 25-26 million tonnes of sugar in the current sugar year that began on Oct. 1, and after meeting domestic demand, about 4 million tonnes could be available for staggered exports.
"It has been decided to allow exports of 1 million tonnes of raws, white and refined sugar under OGL," the statement, dated Dec. 2, on the food ministry's website showed.
Mills should register within 45 days of the issue of the notification for the latest round of exports and permission would be granted within three days of application, it said.
"The export release order shall be issued with the validity period of 60 days," the statement showed.
The food ministry will distribute the quota among mills on the basis of their three years' average output, or two years' average production in case a mill has not been in operation in one of the three years.
India decided to allow 1 million tonnes of sugar exports, double the initial expectations, on Nov. 22.
On Monday, the key December sugar contract on the National Commodity and Derivatives Exchange opened 0.7 percent lower at 2,973 rupees ($58.1) per 100 kg.
Expectations of higher supply from India have kept global prices under check. On Friday, the benchmark New York raw sugar March futures fell 0.14 cent to settle at 23.45 cents a lb. The front month fell to 22.71 cents last week, the lowest level since June.
In 2010/11, India exported 2.6 million tonnes of sugar, including unrestricted overseas shipments of 1.5 million tonnes, popularly termed as sales under OGL.
Exporters from India also compete with Thailand where crushing has begun after minor delays caused by flooding.
India's decision to allow the exports under OGL comes as global markets were expected to see ample supplies, according to industry expert Jonathan Kingsman, who expects up to 8 million tonnes surplus in the next 12 months.
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