The government may withdraw export subsidies on sugar as the country has already reached sugar exports of 30 lakh tonne during the current season as the limit set by the finance ministry.
The export subsidies announced by the Centre early last year is valid till September 2008. The government also said that the export subsidy may discontinue once the export figure reaches 30 lakh tonne. ?The country may witness sugar production of 265-270 lakh tonne during the current season 2007-08. Of which, nearly 30 lakh tonne of exports have already been registered,? a senior government official told FE. When asked about export subsidies whether it will continue or not he said, ?It is an internal matter and I can?t say anything.?
The government is defraying internal transport, handling and marketing charges and ocean freight on sugar exports at Rs1, 350 a tonne for mills located in coastal area and Rs1, 450 for non-coastal states. The country is currently exporting white and raw sugar to Middle East and East Africa. Exporters are currently quoting $330 per tonne (Ex-Mumbai and Kandla) for white grade and $300 per tonne for raw grade. ?Depreciating rupee has given a ray of hope to the export market but competition from Brazil and rising freight cost could play spoilsport. Fast approaching monsoons are another factor that could dent exports. It would become difficult to ship out sugar from Indian ports during the rains,? an analyst with Kotak commodities services said. The country may export about 35 lakh tonne of white and raw sugar this season against 17 lakh tonne recorded last season, according to trade sources.
Sugar consumption in the country is expected to rise to 227 lakh tonne in season 2008-09 from 217 lakh tonne during the current season. The current season started with opening stock of 110 lakh tonne. The country is expected to record about 270 lakh tonne during the current season against 283 lakh tonne last season, sources said.