The Government on Thursday announced an incentive for sugar mills in the form of an additional domestic sales quota to those that export sugar and divert the commodity towards ethanol making, in the new 2021-22 season starting October. The Government said that sugar mills have contracted for export of seven million tonnes, against the mandatory quota of six million tonnes fixed for the current season ending next month so far in the current 2020-21 season.
Out of this, more than 5.5 million tonnes of sugar was exported till August 16. Exports stood at 5.96 million tonnes in 2019-20, 3.8 million tonnes in 2018-19, and 6,20,000 tonnes in 2017-18 season. Due to the improvement in liquidity of mills following Government measures, the ministry said Rs 75,703 crore cane dues of the 2019-20 season were cleared by mills and only Rs 142 crore arrears are pending now. In the ongoing 2020-21 season, mills purchased a record sugarcane worth about Rs 9,07,872 crore, against which about Rs 81,963 crore cane dues have already been paid to farmers, it said.
“ Sugar mills have also been asked to take advantage of firm global sugar prices and plan export of raw sugar in advance in the new season (October-September), it said.
This indicates that the government is unlikely to extend the export subsidy from the new season, as it would be easier for domestic mills to sell sugar abroad in view of firm global prices. India, the world’s second-largest sugar-producing country, had to offer export subsidies in the past two years, to reduce surplus stocks and help cash-starved sugar mills clear cane payment to growers.
In a statement, the Ministry of Consumer Affairs, Food & Public Distribution said, “Sugar mills which will export sugar and divert sugar to ethanol would also be given incentive in the form of additional monthly domestic quota for sale in the domestic market.”