Sweet charity: Centre approves Rs 3,500 cr subsidy for sugar exports

In a bid to provide relief to the sugar industry, crushed under arrears of mounting sugarcane prices and dispose of inventory, the Centre on Wednesday approved a subsidy of Rs 3,500 crore to sugar mills for the export of 60 lakh tonnes during the 2020-21 season. The industry has hailed the much-awaited decision on the sugar export programme for 2020-21 sugar season. At current world prices, even if there is a small correction therein, sugar exports from India would be viable with the export subsidy of Rs 6,000 per tonne.

The industry says that while the subsidy is lower than last year's, considering that global sugar prices are higher as compared to those in the same period last season, it will perform well again in 2020-21. India had exported a record 57 lakh tonnes of sugar in 2019-20. The industry, as on date, has to clear Rs 8,500 crore to sugarcane farmers, of which Rs 6,000 crore alone are in Uttar Pradesh.

National Federation of Cooperative Sugar Factories MD Prakash Naiknavre told The Free Press Journal, It is a good decision, albeit taken a little late. But still India has a window of export opportunity till April 2021 because Brazilian sugar will not arrive in the global market before April. There is more opportunity for Maharashtra, Gujarat and Karnataka, which are blessed with port facilities and therefore, the sugar mills in these three states should seriously take up the production of sugar required by the global market.’’

On the other hand, the Indian Sugar Mills Association (ISMA) said even though 2.5 months of the current season are over, considering that several large importing countries have been enquiring about Indian sugar and also considering that the drop in sugar production from Thailand gives an opportunity for India to export to the former's traditional markets like Indonesia and Malaysia, the Indian sugar industry should be able to fulfil the target of 60 lakh tonnes of sugar exports in 2020-21.

ISMA Director General Abinash Verma said, This will help reduce the sugar stocks and from an opening balance of 107 lakh tonnes as on October 1, 2020, we should be able to reduce carry forward into the next season on October 1, 2021, to 96 lakh tonnes. The 60 lakh tonnes would give the industry Rs 18,000 crore from exports and subsidy, which will help reduce cane price arrears.’’ He further noted that the other good news of budgetary allocation of Rs 5,300 crore for past subsidies would further help sugar mills clear their cane price arrears.

The Free Press Journal, on November 3, had written about the sugar industry’s demand for the announcement of a policy for the export of 60 lakh tonnes, in view of excess sugar production and less sugar consumption in the country.

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Free Press Journal