Cabinet Approves Sugar Export Subsidiary For 4 Lakh Tonnes of Raw Sugar 13-Feb-2014

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As per the official release, the Cabinet Committee on Economic Affairs (CCEA) has approved a subsidy amount of Rs 3,333 per tonne for export of 4 million tonne of raw sugar for February and March, 2014.

The food ministry has suggested an incentive of Rs 2,000 per tonne in the cabinet The subsidy amount has been calculated on the basis of the current exchange rate. However, agriculture ministry has recommended Rs 3,500 per tonne. Sugar industry, which is struggling because of high cane price and low sugar price, has also demanded the subsidy. Indian Sugar Mills Association (ISMA) stated that domestic market sentiments should now improve and the domestic sugar prices will stop falling helping the sugar mills to reduce some of their losses. Though not much time is left for producing raw sugar in the balance crushing period during this season, we expect that this will give some of the much required liquidity to the sugar mills

ISMA also said that the subsidy push would help clear off a part of the cane price arrears of the farmers, which has already crossed Rs 10,000 crore and is feared to touch Rs 15,000 crore in the next couple of months.