Sugar export subsidy cut from Rs 6,000 to Rs 4,000 per tonne as global prices rise

The Centre on Thursday slashed subsidy on sugar exports from Rs 6,000 per tonne to Rs 4,000 per tonne with immediate effect in view of firm global prices. 

For the ongoing 2020-21 marketing year (October-September), the government had fixed a subsidy of Rs 6,000 per tonne to facilitate exports, thereby improving the liquidity of mills and enabling them to clear cane price dues to farmers. 

Sugar mills were mandated to export 6 million tonnes (mt) of sugar in the current year. So far, 5.7 mt of the sweetener has been contracted for export. 

“Keeping in view of firm global prices of sugar, we have reduced subsidy on sugar exports by Rs 2,000 per tonne to Rs 4,000 per tonne with immediate effect,” Joint Secretary in the Food Ministry Subodh Kumar said. 

The ministry had issued a notification in this regard on May 20. The reduced subsidy rate would be applicable to export agreements executed on May 20 or later, he said. There would not be an impact of this decision on sugar exports from India, he added. 

Observing that there had been a steady increase in global prices of sugar because of likely shortages in the world market, Mr Kumar said, “If there is a further increase in global prices, we will further reduce the subsidy.” 

Commenting on the development, All India Sugar Trade Association Chairman Praful Vithalani said, “The government wishes that some sugar trade should take place without subsidy. Since 5.7 million tonnes of sugar has already been contracted in the current year, the world should know that sugar from India will be available without subsidy hereafter.” He added that there would not be any impact on sugar exports, and that there was a demand for raw sugar from India without subsidy.

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