IBEF: November 09, 2020
According to Food Secretary Mr. Sudhanshu Pandey, the government is reassessing the extension of sugar export subsidies as India has a strong opportunity to sell the sweetener on the global market in the 2019-20 season that started this month between November and April.
To minimise surplus stocks and help cash-starved sugar mills direct sugar payments to farmers, India, the second largest sugar-producing country in the world, had to offer export subsidies over the last two years.
As per official data, sugar mills exported 5.7 million tonnes of sugar compared to the mandatory quota of 6 million tonnes set for the 2019-20 season (October-September).
Mr. Pandey said, "The production in Thailand is set to decline this year, while the processing in Brazil will only begin in April 2021. India has strong export opportunities from now until April.
"This is the opportunity that the industry has to consider taking, given that India is expected to have a bumper sugar production this year, we are doing our best," he added.
According to official sources, the Ministry of Food is working on a cabinet approval proposal to expand the current sugar export policy to approximately 6 million tonnes for the 2020-21 season.
Food Minister Mr. Piyush Goyal said on October 30, the government was not considering expanding the export subsidy scheme, but after several rounds of consultation with stakeholders and policy makers, sources said, a fresh thought was given to the proposal.
Industry experts say India needs to export more than 5 million tonnes of sugar this year to ensure that domestic prices do not drop below production costs and make it hard for mills to compensate cane farmers on time.
As domestic sugar production is pegged at 31 million tonnes, well above the annual demand of 26 million tonnes, the surplus stock situation is expected to continue this season.
Mr. Pandey said the government is supporting mills to manufacture ethanol rather than sugar to prevent sugar glut-kind of scenario as the former can be used under the National Biofuel Policy for blending with petrol.
Subsidized loans are being granted to millers for distillery capacity expansion to achieve ethanol production of over 360 crore litres and to meet the ethanol blending target of 10% by 2022 and 20% by 2030 for petrol, he added.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.