India has revived a proposal to get sugar mills to export 6 million tonnes of the sweetener by incentivising overseas sales in the 2020-21 season, the third year in a row, as part of efforts to cut surplus stocks and prop up local prices, two government sources said.

As late as a few weeks ago, India was considering giving incentives for sugar exports, but a delay in any announcement — made before October 1 in the previous two years — prompted local mills and global traders to believe that the world’s No. 1 consumer of the commodity has dropped plans to subsidise sugar exports this year.

Mills cannot export sugar without govt’s fiscal incentives, says NFCSF

Cane grower payments

The government is again considering giving incentives to mills to export 6 million tonnes of sugar in 2020-2021, but it has yet to agree the amount of subsidy, said the two government sources, who didn't wish to be identified in line with official rules.

The government, which has sought the views of the sugar industry, is keen that cane growers’ payments by sugar mills do not get delayed, the sources said.

Higher production has hammered prices, hitting mills’ financial health and making it hard for sugar barons to make timely payments to cane farmers.

Sugar mills want Centre to continue export subsidy

Although India is yet to decide on the exact amount of the subsidy, it is likely to be lower than last year, as global prices have jumped 13 per cent since the current sugar season began on October 1, both government sources and industry officials said.

In 2018 and 2019, India approved the sugar export incentive before October 1 as New Delhi was pushing mills to sell sugar to clear dues they owe farmers.

In the 2019-20 season, an export subsidy of ₹10,448 a tonne helped India export a record 5.7 million tonnes of sugar.

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