Govt likely to extend sugar export subsidy

Country may go for over 10% ethanol blending.

The government today said that it might consider extending the export subsidy given to sugar mills by another year.

The country is on its way to another record production of over 30 million tonnes in the ongoing sugar season (October-September).

"Let us see what will be the total exports in the sugar season. It looks like we have already crossed the 1.5 million tonnes mark and if the trend continues, we will also definitely give serious thought to the one-year extension," Agriculture and Food Minister Sharad Pawar told reporters here.

He was speaking on the sidelines of the 73rd annual general meeting of Indian Sugar Mills' Association (ISMA).

The export sops announced earlier this year will be valid till April 2008. The government is defraying internal transport, handling and marketing charges and ocean freight on sugar exports at Rs 1,350 a tonne for mills located in the coastal areas and Rs 1,450 for those in the non-coastal areas.

The government will also allow sugar mills to convert sugarcane juice directly into ethanol. This would help in diverting the surplus sugarcane to ethanol besides preventing a sugar glut in the future. Pawar also said a notification to this effect would be issued within a month.

Ethanol blending with petrol at 5 per cent is being followed in the country on a mandatory basis. This blending level will increase to 10 per cent from October 2008.

Stating that oil companies were not taking the ethanol programme as seriously as they ought to, Pawar demanded the government to set up an empowered committee to oversee the programme.

He added that the country could even go for over 10 per cent ethanol blending in the future.

Earlier inaugurating the function, Pawar said the domestic sugar industry was today facing a situation of "very high stocks, low prices of sugar and lack of demand for its sugar".