Mumbai: The government has approved a Rs850 crore relief package for sugar exports even as it lifted a ban on overseas sales in January on expectations of higher production this season.

Announcing this, agriculture minister Sharad Pawar said the government would bear an expenditure of Rs1,300 per tonne for sugar to be exported by the states, which had ports and Rs1,400 for those who were away from the coast.

Pawar said sugar production this year was expected to be around 250 lakh tonnes and the country had carryover stock of 40 lakh tonnes from last year. The total availability of the commodity this year would be around 290 lakh tonnes against the country''s annual requirement of around 190 lakh tonnes, he said.

He, however, said the incentive package for sugar exports had been referred to Election Commission for its approval in view of the coming assembly polls in Uttar Pradesh.

Pawar also ruled out wheat exports, although he said, "The wheat crop this year is expected to be good with the yield expected around 72 million tonne," adding, the government could import good quality wheat to the tune of 30 lakh tonnes if need be.

Industry sources, meanwhile, said sugar output in India, the world''s second-largest producer, may cross 260 lakh tonnes in 2006-07 against the earlier estimates by Indian Sugar Mills Association and National Federation of Cooperative Sugar Factories that production may cross 250 lakh tonnes.

"The output is estimated to cross 260 lakh tonnes in 2006-07 season against 193 lakh tonnes last year as all the sugar producing states are producing more than last year," industry sources said.
Maharashtra is likely to replace Uttar Pradesh as the country''s top producer with an expected output of 84 lakh tonnes, the sources said. The state government had recently raised output estimates to 81 lakh tonnes from 70 lakh tonnes.

Uttar Pradesh is likely to produce 77 lakh tonnes, Tamil Nadu 26 lakh tonnes and Karnataka 25 lakh tonnes, they added. Output for Andhra Pradesh and Gujarat is pegged at 15 lakh tonnes each.