The sugar industry and exporters have demanded the Center to immediately announce a policy providing subsidy for at least 60 lakh MT sugar export to save the industry from reeling under loan burden.

The industry has warned that government’s delay in announcing export policy and subsidy will directly affect over 5 crore small sugarcane producer farmers as sugar mills will not be able to pay them owning to excess sugar production and the government’s apathy towards export.

Following the demand made by Indian Sugar Mills Association (ISMA) and National Federation of Cooperative Sugar Factories Limited (NFCSF), the Central government had started issuing subsidy for sugar export for the last two seasons.

“In 2019-20 India exported 57 lakh MT sugar and by December 31 another 2-3 lakh MT will be exported taking the total export to 60 lakh MT. It was only in 2007-08 that India had exported 49 lakh MT sugar and that record has been broken this year,” as per the NFCSF statement.

According to market players, Indian exporters have created a space for Indian sugar in Indonesia, China, Bangladesh, Korea, Malaysia, Sri Lanka, Iran, UAE and even in African countries. According to the NFCSF, the export has helped reduce surplus sugar quota laying with 535 sugar mills and fetched money to repay loans and interests.

Losing global market

However this year, the Centre has not taken a call on the continuation of sugar export subsidy. Sugar mills and exporters claim that because of the government’s policy, the sugar industry will lose the international market it has created.

“There is a dire need of announcing sugar export policy for 2020-21,” Prakash Naiknavare, Managing Director, NFSSF, told BusinessLine . He added that surplus sugar from countries like Australia and Brazil is available in the international market and import-export contracts with these countries are taking place.

The NFCSF has strongly contested Food and Commerce Minister Piyush Goyal’s statement that the government is not considering an extension of sugar export subsidies for the 2020-21 season as sugar price is stable in the international market. The Minister claimed that domestic sugar prices are stable at ₹40 per kg which helps sugar mills to cover the cost of production.

“The Minister’s statement is not based on facts. The temporary rise in sugar price in the international market is because of the delay of sugar consignments from Brazil. (In India) the sugar price rise is because of the government’s indecision regarding the export,” NFCSF stated.

Sugar mills claim that the sugar price of ₹40 kg quoted by the Minister is from the retail market. The actual rate of sugar at the mill is ₹31-31 per kg after deducting GST, transport and commissions.

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