The government on Wednesday permitted export of an additional 1,146 tonnes of raw sugar to the US under the tariff rate quota (TRQ), which entitles shipments to enjoy low tariff.

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"Additional quantity of 1,146 tonnes of raw cane sugar to be exported to USA under TRQ upto September 30 has been notified," Directorate General of Foreign Trade (DGFT) said in a notification. It said that with this allocation, quantity for export of sugar to the US under TRQ during US fiscal year 2016 would be 10,293 tonnes.TRQ is a quota for a volume of exports that enters the US at low tariffs. After the quota is reached, a higher tariff is applied on additional imports. The move assumes significance as the government has recently imposed 20% customs duty on sugar exports to boost domestic supply and check prices which are ruling high at Rs 40 per kg.

India, the world's second largest sugar producer after Brazil, has exported 1.6 million tonnes of sugar so far in the 2015-16 marketing year (October-September). Further exports are unlikely to take place with the latest decision. The country's sugar production is estimated to decline to 25 million tonnes in 2015-16, as against 28.3 million tonnes last year. The annual domestic demand is pegged at 26 million tonnes.

Moreover, the government has forecast further decline in output in next year at 23-24 million tonnes. However, it has maintained that there would be no shortage as the country would have the opening stock of 7 million tonnes at the start of the next marketing year, taking total availability to 30-31 million tonnes.