The government had to offer export subsidies during the last three seasons to reduce surplus stocks and help cash-starved sugar mills clear cane payments to growers on time.
The Centre has so far cleared Rs 1,800 crore in subsidy to sugar mills for undertaking a mandated export of 6 million tonnes of the sweetener in the 2020-21 season-ending this month, according to a senior food ministry official.
The government had to offer export subsidies during the last three seasons to reduce surplus stocks and help cash-starved sugar mills clear cane payments to growers on time. It offered subsidies for the export of a fixed quota of sugar.
“About Rs 3,500 crore budget was allocated towards export subsidy for the ongoing season. Out of which, Rs 1,800 crore has been spent on clearing the subsidy claims,” the official told PTI.
The balance subsidy will be paid to mills soon, once the funds are released from the finance ministry, he said.
The official said mills have already exported the entire quota of 6 million tonnes set for the current 2020-21 season. They have also exported sugar without subsidies taking advantage of the firm global trends.
This has encouraged mills to clear Rs 8,300 crore cane price dues to farmers so far in the current season, against the total payable dues of Rs 91,000 crore, he said, adding that the balance will also get cleared by the mills.
Exports were undertaken smoothly even as the government slashed subsidies on sugar exports for the current season from Rs 6,000 per tonne to Rs 4,000 per tonne because of firm international prices.
On the pending subsidy claims of the 2019-20 season, the official mentioned that Rs 5,000 crore subsidy claims were cleared so far. The balance of Rs 1,200 crore will be paid to mills in the next two months.
Going forward, the government has decided not to offer subsidies in the new season 2021-22, beginning October onwards, as the international sugar prices are ruling firm — owing to likely shortage of the cane crop in the world’s largest sugar producing nation Brazil.
Recently, Food Secretary Sudhanshu Pandey in a press briefing had said there was no need for subsidies for undertaking sugar exports in the 2021-22 season.
According to the ministry, the country’s sugar production is likely to remain flat at 30.5 million tonnes in the next 2021-22 season as more sugarcane will be diverted for ethanol making.
Sugar production is estimated to have reached 31 million tonnes in the 2020-21 season (October-September).
India is the world’s second-biggest sugar producer after Brazil.