New Delhi: Considering the glut like situation in sugar, Agriculture Minister Sharad Pawar has sought permission to allow sugar exports immediately saying this would help the industry to pay cane growers.

Pawar has sought the intervention of the Finance Minister for an early decision on this issue because the window to export sugar from India is available only upto end of April.

In a letter to Finance Minister Pranab Mukherjee, Pawar said: "The estimated sugar production of 24.5 million tonnes (MT) would now be nearly 25 MT, more than the estimated consumption of 22 MT during 2010-11 sugar season.

"Considering committed exports under the advance license scheme (ALS) of 1.2 MT, there is still a exportable surplus of 1.3 MT in the country," he said.

Since the empowered group of ministers (EGOM) on food is yet to discuss and take a decision on allowing sugar exports under the open general licence (OGL), Pawar has pressed the panic button saying any delay would lead to increase in cane arrears and reduction in cane area in the coming years.

At present, the government has kept on hold export of 0.5 million tonnes of sugar under OGL as the Prime Minister has directed the Food Ministry to refer the matter to the EGOM in view of high inflation. But earlier, it had allowed mills to meet their export obligation (ALS) of nearly 1.2 million tonnes by March 2011.

Pawar explained that extension of stock holding limit and substantial surplus sugar has depressed domestic prices below cost of production, thereby leading to mounting cane arrears.

He observed that high cane arrears may lead to reduction in cane area in the coming years.

In Uttar Pradesh, cost of sugar production is Rs 2,950 a quintal, while ex-mill price is Rs 2,800 per quintal.

Highlighting the need to permit immediate export of sugar, Pawar said that Brazilian sugar will be entering the market from May, "after which the price differential between Indian and the global sugar would not be conducive to exports".