Modi govt not considering extension of sugar export subsidies for 2020-21, says Piyush Goyal

By: |
October 30, 2020 8:31 PM

India, the world's second-largest sugar-producing country, had to offer export subsidies during the last two years in order to reduce surplus stocks and help cash-starved sugar mills clear cane payment to growers.

In the normal sugar season, about 320 lakh tonnes of sugar is produced against domestic consumption of 260 lakh tonnes.In the normal sugar season, about 320 lakh tonnes of sugar is produced against domestic consumption of 260 lakh tonnes.

The government is currently not considering an extension of sugar export subsidies for the 2020-21 season that commenced this month in view of stable international sugar prices, Food and Commerce Minister Piyush Goyal said on Friday. India, the world’s second-largest sugar-producing country, had to offer export subsidies during the last two years in order to reduce surplus stocks and help cash-starved sugar mills clear cane payment to growers. Sugar mills exported 5.7 million tonne of sugar against the mandatory quota of 6 million tonne set for the 2019-20 season (October-September), as per official data.

“Sugar (export) subsidy is currently not under consideration because international prices are stable. If there is any requirement, the government will examine it at an appropriate time,” Goyal told at a virtual press conference. He was replying to a query if the government has plans to extend sugar export subsidies for the third year in a row. The minister also mentioned that domestic sugar prices are ruling stable at Rs 40 per kg, a level that covers the cost of production for sugar mills. “Therefore, sugar mills will not face any problem in clearing cane dues,” he added.

Food Secretary Sudhanshu Pandey said the country has exported the highest ever quantity of sugar in the 2019-20 season. About 5.7 million tonnes were shipped. He also said sugarcane arrears are lower and mills should be able clear it fast this year. Industry experts are of the view that India needs to export more than 5 million tonnes of sugar this year to ensure domestic rates do not fall below the cost of production and make it difficult for mills to pay cane growers on time. The surplus stock situation is expected to continue this season as well because domestic sugar production is pegged at 31 million tonne, well above the annual demand of 26 million tonne.

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