Decision on extending sugar export subsidy soon: Secy

The government will soon take a final decision on extending subsidy for exports of raw sugar in the current 2014-15 marketing year, a top food ministry official said today.
Addressing the 80th Annual General Meeting (AGM) of sugar industry body ISMA, Food Secretary Sudhir Kumar said: "The issue is under examination. There are different points of view. There are WTO implications...Whatever decision has to be taken will be taken soon. We are moving in that direction".
In February this year, the Centre had announced subsidy for exports of raw sugar up to 40 lakh tonnes during 2013-14 and also 2014-15 marketing years (October-September) to help the cash-starved industry to clear cane arrears to farmers.

However, the scheme has not been extended after September this year.
The secretary noted that there has been delay in taking a decision on whether to extend the subsidy on raw sugar exports for 2014-15 as it "took some time" to make assessment of sugar production, consumption and domestic stocks situation.
"Now, the picture is clear. Our assessment is that the opening stock (as on October 1) was 72 lakh tonnes and going by production and consumption estimates, this year's closing stock could be around 74 lakh tonnes," he said, adding that there was scope for export of some quantity of sugar.

"Now the facts and positions are clear, it should not take much time to decide," Kumar asserted.

The secretary agreed with the industry that there was no point in delaying the decision as the window of opportunity for export of Indian sugar would end after Brazilian sugar enters global market from March onwards.
Under the export incentive scheme, India had exported 7.5 lakh tonnes of raw sugar in 2013-14 marketing year, entailing a subsidy outgo of around Rs 200 crore from the exchequer.
Indian Sugar Mills Association (ISMA) President A Vellayan said that industry is facing a very "challenging situation" due to falling prices of sweetener, excess production and tightening of lending by banks, forcing the millers to sell at cheaper rates for generating cash-flow.

Elaborating further, ISMA Vice President Tarun Sawhney said about 50 per cent of mills in Uttar Pradesh have not got the loans from banks for working capital requirement.
ISMA demanded that the government should extend export subsidy, create buffer stock of 2 million tonnes, increase in import duty to 40 per cent, hike in sugar prices sold through ration shops and creating infrastructure for 10 per cent blending of ethanol in petrol.
Sugar production of India, the world's second largest producer, is set to exceed the demand for fifth year in a row.
According to ISMA, the production is estimated to rise to 250-255 lakh tonnes in 2014-15 marketing year as compared to 244 lakh tonnes in the previous year. The annual demand is pegged at 230-240 lakh tonnes.