Nov 9, 2020
As India has got a decent opportunity to sell the sweetener in the international market during November-April of the 2019-20 season, hence government is reviewing the extension of sugar export subsidies.
India, the world’s second-largest sugar-producing country, had to offer export subsidies during the last two years in order to reduce surplus stocks and help cash-starved sugar mills clear cane payment to growers. Sugar mills exported 5.7 million tonnes of sugar against the mandatory quota of 6 million tonnes set for the 2019-20 season (October-September), as per official data.
On October 30, Food Minister Piyush Goyal had said the government was not considering the extension of the export subsidy policy, but after several rounds of consultation with stakeholders and policymakers, fresh thought is being given to the proposal.
Industry experts are of the view that India needs to export more than 5 million tonnes of sugar this year to ensure domestic rates do not fall below the cost of production and make it difficult for mills to pay cane growers on time.
The surplus stock situation is expected to continue this season as well because domestic sugar production is pegged at 31 million tons, well above the annual demand of 26 million tonnes.
According to Food Secretary Sudhanshu Pandey, Thailand’s production is expected to decline this year, while Brazil’s crushing will only start in April 2021. From now till April, there is a good export chance for India. This is the opportunity the industry has to encash upon, we are doing our best given that India is expected to have a bumper sugar production this year.
The food ministry is working on a proposal for seeking cabinet approval for the extension of the existing sugar export policy for about 6 million tonnes in the 2020-21 season.