The Centre's announcement providing a subsidy of Rs 10,448 per tonne of sugar exported from India has come as a major bonanza for the sector which is allegedly controlled by politicians in Maharashtra.

 

"Exports of sugar from Maharashtra will begin immediately since a subsidy of Rs 10.45 per kilogramme makes it very attractive for mills in the state," says Prakash Naiknavare, Managing Director, National Federation of Cooperative Sugar Factories. 

 

According to Naiknavare, officials from sugar mills have been visiting potential importers for the past year and many of the facilities have undergone technological

upgradation to produce the extra white sugar in demand from international consumers.

 

Sugar producers in Maharashtra are eyeing markets in China, Bangladesh and Indonesia with several delegations visiting these countries earlier this year.

 

According to trade sources, Maharashtra's sugar mills are sitting on am unsold inventory of around 13 million tonnes of which around a quarter is available for export.

 

"Sugar mills can earn nearly Rs 2000 crore by exporting the surplus inventory in their godowns," says an official from the Maharashtra sugar federation.

 

India produces around 35 million tonnes of sugar annually while the domestic demand for it is around 26 million tonnes.

 

Maharashtra, which is the second largest producer of sugar after Madhya Pradesh, has been saddled with huge unsold stocks of sugar. Earlier this year, sugar mills in the state had asked farmers to take payment for sugarcane in the form of sugar since they did not have adequate funds.

 

The export subsidy scheme comes at a time when several politicians from the Congress and the NCP who control sugar co-operatives have joined the BJP. Elections in the state are slated to be held in October this year.