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The Government has notified the incentive for sugar mills to export raw sugar. The rate of incentive will be ₹3,300 a tonne for February and March.
According to a gazette notification dated February 28, sugar factories which produce raw sugar and undertake export either by themselves or through exporters will be eligible for this incentive.
The incentive will be provided from the Sugar Development Fund. It will be reviewed before the commencement of next season. The Cabinet Committee on Economic Affairs approved the incentive on February 12.
The incentive will be for 40 lakh tonnes of raw sugar produced and exported during 2013-14 and 2014-15 sugar seasons. The incentive will be utilised to make payment of cane arrears. Cane arrears have already crossed ₹10,000 crore.
The notification, while prescribing the rate of incentive for February and March, says that rates will be recalculated every two months after taking into account the average exchange rate of rupee vis-à-vis dollar as on the seven days immediately preceding April 1, June 2, and August 1, 2014, for April-May, June-July and August-September respectively. The date of shipment will be the basis for determining the incentives.
The move will directly benefit sugar mills in Maharashtra and Karnataka provided they ship out the raw sugar over the next two months. Other sugar producers will indirectly stand to benefit on expectations that domestic prices will stabilise.
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