The approval by the Cabinet Committee on Economic Affairs on Wednesday for for sugar export subsidy would help reduce the surplus sugar inventory, according to the Indian Sugar Mills Association (ISMA).
Abinash Verma, director general, ISMA, said that the export of six million tonnes of sugar during the 2019-20 marketing season would not only reduce the surplus inventory of the commodity in the country next season but also result in an additional cash flow of ₹18,000 crore in the sector, including subsidy amount.
With an expected global deficit next season of nearly four million tonnes, “the timely announcement of India’s export programme with a WTO compliant export subsidy of ₹10,448 per tonne will enable Indian millers export the six million tonnes,” he said.
An industry source said sugar production this season (October 2018 to September 2019) in the country was almost 33 million tonnes and close to four million tonnes of sugar were exported.
The opening stock next season (2019-20) is expected to be 14.5 million tonnes and the production 28.5 million tonnes. In the current season, though exports were expected to be five million tonnes, it is close to four million tonnes, mainly as international prices were down. In the next season, a global deficit is expected.
Hence, exports are likely to be viable for the Indian sugar sector. “It is a huge stock [that we have] and we need to export. Now, people can plan for the next season,” the source said.
R. Varadarajan, whole-time director, Rajshree Sugars and Chemicals, said while the export subsidy would benefit mills in north India, sugar mills in Tamil Nadu need a “larger support package.” The mills in Tamil Nadu were already operating below capacity.
So, the units here might still not be able to export. The Tamil Nadu mills need incentives without linking them to exports, he said.