Comments
With sugar prices hitting three-year low on the back of rising production, millers want the Centre to take an early call on the continuance of incentives for raw sugar exports.
On Wednesday night, the Government ratified the methodology used for calculating raw sugar export subsidy for April-September period.
With more than a month into the new sugar season that began in October, millers are waiting for a clear indication from the Government on the quantum of subsidy for the current season.
In February this year, the Government had said that exports of raw sugar of up to 40 lakh tonnes produced during 2013-14 and 2014-15 seasons would be subsidised.
The move was aimed at helping millers clear cane arrears, while shipping out surplus stocks. The bi-monthly subsidy originally fixed at ₹3,300 a tonne for February-March last year is being revised every two months. For August-September it was fixed at ₹3,371. However, the scheme has not been continued after September.
“It is important that the Government announce the quantum of subsidy at the earliest as sugar prices are coming under further pressure with the rise in production,” said an industry official. An early announcement would help the industry players enter new deals and ship out the surplus sugar that may help stabilise prices of the commodity, he said.
Currently, raw sugar exports are not viable as Indian prices are higher than global rates. A subsidy of at least ₹4,000 will make the exports of raw sugar viable, sources said.
Ex-mill prices of sugar in Maharashtra are hovering at a low of around ₹2,400 a quintal, while some factories are resorting to distress sale, the sources said.
While the sugar production has picked up, industry official believe that cane arrears would build up soon, unless the exports commence and surplus is shipped out. The crushing season is expected to go on till March-April.
According to the Indian Sugar Mills Association, production till mid-December was up 47 per cent at 42.35 lakh against 28.85 lakh tonnes in corresponding period a year ago.
The increase in production is putting pressure on prices and ex-mill prices have been falling daily between ₹10 and ₹40 a quintal, ISMA said.
Domestic consumption of sugar is pegged at 247 lakh tonnes, while the production for the 2014-15 season is estimated to be between 250 and 255 lakh tonnes.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.