Modi govt cuts subsidy on sugar exports to Rs 4,000 per tonne from Rs 6,000 on high global prices

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May 20, 2021 8:32 PM

Sugar mills were mandated to export 6 million tonne of sugar in the current year.

sugar stocks, Dalmia Bharat, Dwarikesh, Avadh SugarApart from the news of India advancing its target of 20 percent ethanol blending in petrol by five years, frantic buying in mid and smallcap stocks have led to a surge in the sugar stocks. PTI file photo

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 tonne of sugar in the current year. So far, 5.7 million tonne 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 told PTI. The ministry has issued a notification in this regard on May 20. And the reduced subsidy rate will be applicable to export agreements executed on May 20 or later, he said. There won’t be an impact of this decision on sugar exports from India, he added.

Observing that there has been a steady increase in global prices of sugar because of likely shortages in the world market, 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 (AISTA) Chairman Praful Vithalani said, “The Government wishes that some sugar trade should take place without subsidy. Since 5.7 million tonne of sugar has been contracted already in the current year, the world should know that sugar from India will be available without subsidy hereafter”.

He said there won’t be any impact on sugar exports and there is a demand for raw sugar from India without subsidy. Sugar production in India has reached more than 30 million tonne so far in the 2020-21 marketing year, higher than 27.42 million tonne achieved in the 2019-20 year, as per the industry data.

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