The Hindu Business Line : Maharashtra announces sugar export subsidy

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Maharashtra announces sugar export subsidy

M.R. Subramani

Rs 1,000/t relief package applicable this financial year

Govt bonanza
Restrictions on movement of molasses removed
Three per cent cane purchase tax abolished
Rs 25,000 per acre for farmers unable to clear standing crop before onset of monsoon

Mumbai April 13 A relief package, announced by the Maharashtra Government for the sugar industry in the State, is expected to help the mills in general and the cooperative sector in particular.

The package announced by the Maharashtra Chief Minister, Mr Vilasrao Deshmukh, in the Assembly on Thursday, includes an export subsidy of Rs 1,000 a tonne. More importantly, the package will be for consignments exported from April 1 and last till March 31 next year.

This subsidy is over and above the export subsidy of Rs 1,350 a quintal announced by the Centre for sugar exports. However, the Centre's package which includes transport subsidy and building a buffer stock has been put on hold by the Election Commission in view of the ongoing Assembly elections in Uttar Pradesh.

According to Mr Prakash Naiknavare, Managing Director, Maharashtra Cooperative Sugar Factories Federation Ltd, the announcement of Maharashtra sugar export subsidy for the current fiscal will help exports during the current and next season. The sugar season runs from October to September.

The State Government will offer the subsidy for exports up to 10 lakh tonnes and Mr Naiknavare is confident that despite limited export opportunities, the target would be met.

Mr Naiknavare was interacting at `The Sugar Summit 2007 & Bio-Ethanol 2007' meet as part of the Grains Conference organised by Teflas.

The package would provide a big relief to the mills in the State as currently, they are being forced to sell sugar at Rs 12 a kg against production cost of Rs 14.50 a kg. "In fact, the package will benefit the farmers more," Mr Naiknavare said.

Transport subsidy

As part of the package, the State Government has also come forward to pay a transport subsidy of Rs 2 per tonne per km for sugarcane crushed after 160 days of the beginning of the crushing season. It will be calculated on the basis of when a mill began crushing sugarcane and will last up to 180 days or May 31, whichever is later.

The Government has also come forward to pay Rs 130 a tonne for every percentage drop in recovery, while all restrictions on movement of molasses have been removed. "This means, molasses from Maharashtra can go anywhere and it can also come from any other State," Mr Naiknavare said.

Again, if any farmer is unable to clear the standing crop of sugarcane from his field before the onset of monsoon, then the State Government will pay Rs 25,000 an acre.

The State Government has also done away with the three per cent cane purchase tax. "It could help us in a big way since raw materials make up 78 per cent of our input costs," he said.

Export cell

The Government has also given a fresh impetus to sugar sale by permitting the sugar export cell to function as an arm that could fix prices for the domestic market also.

The cell has till now been fixing prices for export on a weekly basis and on April 9, it decided to cut the export price to Rs 1,275 a tonne free-on-rail.

"The cell had initially decided to set up a floor price above the rates paid by the Centre for supplying sugar compulsorily for distribution through ration shops. But then, we decided to withdraw it from April 9. We will now review the situation," Mr Naiknavare said.

Cogeneration units

Besides approving soft loans to the tune of 75 per cent of the outstanding wage arrears for mills workers, the State Government has also allowed the mills set up cogeneration units which will produce power on a build-operate-transfer basis.

"We will be calling interested parties for this soon," Mr Naiknavare said.

The package assumes significance since its sugar production this year is a record 79.06 lakh tonnes against 67 lakh tonnes last year and it could be left with a carryover stock of over 33 lakh tonnes at the end of the current sugar season.

Also, the State has been hit by the Centre's allocation of sugar for free sale.

According to Mr P. Ramababu, President, Indian Sugar Mills Association, Karnataka too is working out a similar package for its sugarcane growers.

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