Maharashtra: CM Eknath Shinde urges continuation of OGL policy for sugar exports instead of quota system | Case
The Shinde-Fadnavis government has urged the Center to continue the policy of granting open general licenses for sugar exports instead of placing sugar exports under MIEQ (Minimum Indicative Export Quota) or MAEQ (maximum allowable export quota). Chief Minister, Mr. Eknath Shinde, in a letter to Prime Minister, Mr. Narendra Modi, said: ”Maharashtra sugar mills are not comfortable with the idea of placing sugar exports under a controlled regime or a quota system and prefer sugar exports under the OGL system instead. Quotas tend to create unnecessary bureaucratic hurdles and result in gray markets which the Indian government has seriously and rightly discouraged for the creation of a transparent and fair business opportunity in India.
His letter is significant as Maharashtra has become the world’s third largest producer after India and Brazil after the completion of the 2021-22 sugarcane crushing season. Maharashtra had exported 70 lakh tonnes out of 110 lakh tonnes of India’s total sugar exports in 2021-22.
Furthermore, Mr. Shinde argued that the quota regime allows factories that have no interest in exports to indulge in the transfer of their quotas and earn money without any actual export. “This should be avoided as it tends to be disadvantageous for Indian sugar to match international prices,” he noted.
According to Shinde, the prevailing bullish crude oil price stance this year (2021-22) has been advantageous for Brazil to focus on ethanol rather than sugar. ”It looks like the trend will not continue for the coming season, witnessed by the drop in crude oil prices and the decision of the Brazilian government to reduce taxes on it, following which the parity of ethanol has come down to 15 cents and therefore Brazil might rethink its thinking and focus on sugar again at the expense of India,” he said.
Furthermore, Mr. Shinde pointed out that the continuation of the OGL policy is necessary as the window for Indian sugar exports is mainly conducive for a very short period until the end of March when the majority of the crushing is completed. in the country. Brazil seas start from April 1st and this creates competition which under normal circumstances is beneficial to other exporting countries and thus creates negative pressure on Indian sugar exports. Furthermore, the Center is not required to provide financial assistance for sugar exports and therefore controls of any kind should be avoided, allowing the industry to deal with business on a pros and cons basis. international.
“I would be grateful if you could raise this issue with the Ministry of Commerce and the Ministry of Consumer Affairs, Food and Public Distribution for a proper decision at the earliest as the National Federation of Cooperative Sugar Mills and sugar cooperatives at the state level. The federation of major sugar producing states and the private sector sugar mills association of Maharashtra are all on a common platform seeking to pursue the OGL policy,” Mr Shinde said.
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