Sugar exports: Industry restive over delays in subsidy revision

The sugar industry is complaining about the unexplained delay by the government in revising the subsidy for export.

In February, to encourage a reduction in the surplus stock, the government said it would subsidise shipments, with the amount to be decided every two months, based on the commodity’s price and the exchange rate. For February-March, the rate decided was Rs 3,300 a tonne; that for April-May was to be announced in the last week of March. However, this has yet to be done.

“The delay is adversely impacting the physical shipment of exports already contracted,” said Abinash Verma, director-general, Indian Sugar Mills Association (Isma).

Mills had exported 1.45 million tonnes of both raw and refined sugar in the first half of the current season (the sugar year is October to September). Of this, 350,000 tonnes was shipped in March.

Another 350,000–400,000 tonnes of both raw and refined sugar was expected to be physically shipped in April and May. Up to March 31, mills had produced 1.54 mt of raw sugar, of which 0.85 mt was despatched for export. A further delay in announcing the export incentives could mean India missing the target of two mt this year, said Verma.

Isma says sugar production was 23.15 mt until April 15 in the current season, 4.3 per cent lower than the 24.15 mt by the same time last year. It estimates total production at 23.8 mt this year, compared to 25.1 mt in the previous season. Sugar mills havestarted gradually shutting down production facility for the current season.