Announcing the government decision minister for consumer affairs and publicdistribution Shanta Kumar told reporters that the exemption from levyobligation was expected to make Indian sugar competitive in the globalmarket.

"Our stocks as of today is estimated at 242 lakh tonnes as against theconsumption requirement of 151 lakh tonnes. The levy exemption is expectedto enable mills to be competitive in the international market," he said.

With the mills being exempted from the mandatory levy obligation of 30 percent on the quantity exported "there are chances of Indian sugar findingbuyers in a few countries where production shortfalls have been reported,"he said.International prices of different grades of sugar ruled between$190.50 and $216.50 a tonne, while the sugar ready-M variety is sold in thedomestic market at Rs 15025.15065(about $337) a tonne.

Kumar said the ceiling of 10 lakh tonnes would be reviewed later aftertaking into account the supply and demand situation then prevalent in themarket.

Kumar said a `situation of plenty' had emerged in the case of sugarfollowing a record production of 175 lakh tonnes during 1999-2000(October-September) against an initial estimate of 160 lakh tonnes and acarry over stock of 67.5 lakh tonnes from the previous year.

"With a timely and good monsoon forecast for the current year, theproduction prospects appear bright and will add to the mounting stocks. Thishas forced us to explore some ways to reduce the stocks," the minister said.India had previously exported sugar for two consecutive years from 1995-96,shipping a total of 11 lakh tonnes, but despite the government permittingexport of 25,000 tonnes of sugar in value added forms last year, nosignificant quantity was exported due to lack of price competitiveness ofIndian sugar in the global market.Kumar said certain countries includingBrazil, the world's largest sugar producer, and Pakistan had reporteddecline in sugar output this year and Indian millers could find buyers incountries hitherto catered to by these countries.

The minister said every mill exporting sugar would be required to keep anaccount of the quantity shipped and auhtorities under the commerce ministrywould keep a vigil on the whole procedure.

With opening up of export avenue, industry can improve quality and matchinternatioal standards, the minister said.