Sugar mills in Maharashtra are not very happy with the delay in the notification on incentives for raw sugar exports.
According to senior officials from the Maharashtra State Cooperative Sugar Factories Federation (MSCSFF), the delay has caused a loss to the mills that have exported raw sugar between October 2013 and February 2014 to the tune of around Rs 178 crore.
The federation has decided to approach the new government with a demand that the notification be applicable with retrospective effect from October 2013 to April 2014.
According to Sanjeev Babar, MD of the federation, in the 2013-14 crushing season, 8.52 lakh metric tonnes of raw sugar was exported without the support of incentives from the government. “There is a demand for incentives from the ministry of consumer affairs, food and public distribution since the start of the season in October 2013,” he said.
The total shipment in the current season is expected to be 25 lakh tonnes, of which raw sugar export is expected to be 11 lakh tonnes to 12 lakh tonnes.
When the incentive was announced on February 28, the rupee was trading at 62.44 against the dollar but has since become stronger.
“Sugar millers from Maharashtra have demanded that exports before the notification date be considered for the incentive scheme, and order be made applicable with retrospective effect. The state has lost incentives of Rs 178 crore as raw sugar was exported on a large scale before the notification,” Babar explained.
A decision to this effect was taken at a meeting of the federation members last week. Babar said the federation was awaiting the formation of the new ministry and would soon approach the authorities with a proposal to this effect.
The government had notified an export subsidy of Rs 3,300 a tonne on raw sugar shipments undertaken during the February-March period.
The Cabinet Committee on Economic Affairs had approved a proposal in this regard in February to help the industry to pay arrears to sugarcane farmers. “The incentive shall be at the rate of Rs 3,300 a tonne for February and March, and thereafter, be recalculated every two months after taking into account the average exchange rate of rupee vis-a-vis the dollar,” the notification said.
The country is sitting on huge stock of sugar. This year, the output is likely to be 25 million tonnes, higher than the domestic demand of 23.5 million tonnes.