The Centre is looking at ways to help the beleaguered sugar industry clear dues to sugarcane farmers that stood at ₹17,300 crore as of mid-July. Among the proposals forwarded to Prime Minister Narendra Modi at a meeting held on August 1 was the export of 4 million tonnes of the sweetener through barter.

“We are looking to allow export of 4 mt of sugar to countries under the barter system whereby we import other agri-commodities,” said Ram Vilas Paswan, Union Food Minister, on the sidelines of an Assocham event here on Thursday.

While countertrade with countries from whom India imports pulses and edible oils in particular has been suggested as an export model, Government sources cited direct sales by Indian millers to foreign traders as the more likely possibility.

The Commerce Ministry and External Affairs Ministry are also believed to be onboard to formulate the policy. Potential losses incurred by millers given that sugar prices are at a six-year low will be covered by a subsidy paid directly to cane farmers, they informed. “The world is moving away from large state trading institutions which facilitate inter-Government countertrade. This model is not likely to happen. Allowing millers to directly sell sugar abroad where there is a demand is a more feasible solution,” said a senior official.

Average ex-mill sugar prices are currently around ₹ 20/kg, while cost of production is around ₹ 31-32, which has affected mills’ paying capacity.

“Sugar is available at ₹19/kg on the world market, while domestic cost is around ₹20. If we export more quantity, global prices will further fall,” said Paswan, adding that the import duty of 40 per cent has not helped the industry. A final call on the proposal and likely export mechanisms will be taken after another meeting and with the assent of the PM.

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