Centre cuts 2020-21 sugar export subsidy to Rs 4,000/tonne
According to the order issued by the Ministry of Consumer Affairs, Food and Public Distribution, the government subsidy now stands at Rs 4,000 a tonne from the earlier Rs 6,000 a tonne with immediate effect.
The Centre on Thursday slashed the sugar export subsidies for the mandated 6 million tonne export for the season that ends on September 30.
According to the order issued by the Ministry of Consumer Affairs, Food and Public Distribution, the government subsidy now stands at Rs 4,000 a tonne from the earlier Rs 6,000 a tonne with immediate effect.
The previous subsidy rate spurred a flurry of overseas export deals, helping to convince dealers to contract to export 5.7 million tonne of sugar in the 2020/21 season, trade sources said.
The remaining 0.3 million tonne will now get a subsidy of Rs 4,000 a tonne and anything above that, that the sugar mills will export, will be under open general licence (OGL) without subsidy.
Although this a sentiment negative, with not much demand in India and exports looking lucrative, there will perhaps be continued exports from India.
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Late last year, India, the world’s biggest sugar producer behind Brazil, approved subsidies of Rs 5,833 ($79.87) per tonne to encourage cash-strapped mills to export 6 million tonne of sugar in the current 2020/21 season.
Higher sugar exports from India, also the world’s biggest consumer of the sweetener, cut back inventories at home and propped up domestic prices, which helps the country’s money-losing mills.
With text input from Reuters
(Edited by : Abhishek Jha)
First Published: May 21, 2021 7:45 AM IST
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