In a move to curtail exports in the coming season, the Cabinet committee on prices (CCP) that met on Thursday has decided to discontinue the transport subsidy on exports after its due expiry date on September 30. Currently, the central government gives a export subsidy of Rs 1,350 per metric tonne for mills situated near ports and Rs 1,450 per tonne for mills located away from ports. The subsidy was announced for one year ending April 2008 and was later extended for six months to facilitate more exports and absorb excess supplies from the market.
However, sources said that the government has decided to discontinue the transport incentive following reports of fall in sugar production in the next crop year, starting October, to around 22 million tonne – 24 million tonne, down from around 26.5 million tonne in the current year. ?It was decided at the CCP meeting that the concession on sugar export will not be extended after September 30,? agriculture minister Sharad Pawar told reporters.
According to industry estimates, local mill-owners have already exported around 4.5 million tonne of sugar in 2007-08. Meanwhile, the government is expected to take a final decision on extending the suspension of futures in four farm commodities in the next couple of days. The suspension will come up for review on Saturday.
In May the government suspended futures in refined soyaoil, chana (chickpea), rubber and potato for four months to tame surging inflation.