The Cabinet Committee on Economic Affairs has approved the extension of production subsidy to sugar mills that achieve a minimum performance standard with regard to export of sugar and supply of ethanol. This has been done to offset the rising cost of cane and facilitate timely payment of cane price dues of farmers.

“Due to drought situation, there has been significant decline in sugarcane/sugar production in the country by about 1.8 million MT (mMT) and 0.8 mMT respectively,” according to a government statement. “Drought-affected States requested to reduce the target of sugar export and ethanol supply due to non-availability of sufficient sugarcane and molasses.”

Initially, the export quota target was at 15.70 kg of sugar for each tonne of estimated cane crushing.