This Article is From Feb 23, 2010

Sugar: Exports despite shortage leave Govt red-faced

New Delhi: Sugar prices have been rising, and the government has been offering sweet nothings. But on Tuesday the entire Opposition - even UPA's allies - will put the government in the dock over price rise.

At this juncture, a notification by the Directorate General of Foreign Trade (DGFT) is certainly bad news for the beleaguered government.

Though sugar exports are banned, the DGFT issued a notice on February 15 allocating 10,000 Metric tonnes of white sugar to the European Union (EU). The sugar exim corporation was to export the sugar.

Exporting sugar at this time is certainly bad economics and bad politics. To beat sugar shortage and rising prices government imported raw sugar late last year. But then why the DGFT cleared the exports?

The government says export clearance is to honour contractual obligations, but an all out blame game has started between various ministries.

While Agriculture Ministry says Commerce Ministry handles sugar exports, Commerce Ministry says authorisation was given at the request of Sugar Exim Corporation, which is under the Agriculture Ministry.

NDTV has learnt that the food-processing ministry had objected to the export.

Given the sugar shortage and its rising prices, there are red faces in the Congress party and the Opposition is asking for answers.

"It is something that the government and the various ministries should answer," Congress Spokesman Manish Tiwari said.

"This is not mismanagement, this is malafide intent. This export notification should be withdrawn and a probe should be ordered," said Leader of Opposition in Rajya Sabha, Arun Jaitley, said.

Even to many in the government the move comes as a surprise, as just last week the Indian government said no to a request for sugar from the Nepalese government and the reason for the "No" was sugar shortage in the country.
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