Govt extends sugar export sops till Sep 30

The government has extended sugar freight export subsidy till September 30 to bail out mills from the supply glut.

India provides transport subsidy to sugar mills on exports at Rs 1,350 per tn for coastal areas, while the subsidy is Rs 100 more for non-coastal areas. The subsidy, which came into effect on July 27, 2007, expires on April 18.

"The central government has decided to extend the period of eligibility up to Sep 30, 2008," said a food ministry order.

Agriculture and Food Minister Sharad Pawar had recently said the deadline for sugar export incentive would be extended.

India's year to September sugar output is expected to be around 26 million tonnes as against 28.4 million tonnes in the previous year.

The likely output is much higher than annual domestic consumption of around 20-21 million tonnes. India is expected to export around 3 million tonnes sugar in 2007-08, higher than 1.7 million tonnes in a year ago.

Since the beginning of the current sugar year in October, India has so far shipped 2.1 million tonnes of the sweetener.

Of the total exports, about 1.2 million tonnes were raw sugar, while the rest were of white sugar.