Informist, Thursday, Jul 29, 2021

--Sources: Food min moots 3.5 rupees/kg sugar export subsidy 2021-22

--Fin min to now review sugar export subsidy proposal

By Preeti Bhagat

NEW DELHI – The food ministry has sent a proposal on the sugar export scheme to the finance ministry, wherein it has suggested providing a subsidy of 3.5 rupees per kg for the season starting October, two government officials said today. 

For the 2019-20 (Oct-Sep) season, the central government initially announced a subsidy of 6.0 rupees per kg on export of 6 mln tn of the sweetener, which it reduced to 4.0 rupees per kg in May due to firm global prices.

The food ministry has suggested an even lower subsidy for the next season as global prices of raw sugar on the Intercontinental Exchange Futures US have risen nearly 47% over the last one year.

"The proposal has been sent to the review committee of the finance department. It is just an internal proposal which has been sent for review and comments," one of the officials said.

Exports during the season ending September is seen at 7 mln tn, higher than the subsidised quantity of 6 mln tn, according to industry estimates.

Mills are signing contracts under open general licence route without government subsidy to make full use of high international prices and get rid of their excess stock.

According to the World Trade Organization's Agreement on Agriculture, India can give subsidies on transportation, freight, marketing, handling and processing of sugar till 2023.

Looking at the current scenario, it seems that India will be able to get rid of surplus sugar in the years to come by diverting excess sugarcane to ethanol.

The government has been subsidising export of sugar to help clear the surplus in the domestic market and support domestic prices.  End

US$1 = 74.26 rupees

Edited by Mainak Moitra

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