CCEA may take up sugar export subsidy issue tomorrow

NEW DELHI: The Cabinet Committee on Economic Affairs ( CCEA) is likely to take up tomorrow a proposal to extend export subsidy to 1.4 million tonnes of raw sugar in the ongoing 2014-15 marketing year.

"The CCEA meeting is scheduled for tomorrow. The sugar subsidy issue is on the agenda of the meeting," sources said.

As per the proposal, the Food Ministry has favoured extending export subsidy to 1.4 million tonnes of raw sugar with some conditions. It has proposed a subsidy of about Rs 4,000 a tonne, sources said.

The Ministry said that the country would be left with an exportable surplus of 1.4 million tonnes after meeting the domestic demand of 24.8 million tonnes.

Last year, the Centre had announced a subsidy for exports of raw sugar up to 4 million tonnes in order to help the cash-starved industry clear sugarcane arrears to farmers. The subsidy scheme ended in September 2014. It had reviewed the quantum of subsidy every two months.

The Food Ministry had first fixed subsidy at Rs 3,300 per tonne for February-March, and later reduced it to Rs 2,277 for April-May. The same was reinstated at Rs 3,300 for June- July before hiking it to Rs 3,371 for August-September period of last marketing year.

Sugar mills exported about 750,000 tonnes of raw sugar in 2013-14 marketing year (October-September) with an incentive of about Rs 200 crore.

The sugar industry is seeking extension of the export subsidy for this year as mills are facing liquidity crunch to make cane payment in the wake of depressed local prices due to higher production in the last few years.

ISMA estimates sugar production at 25-25.5 million tonnes in the current marketing year, while the government's projection is 25.05 million tonnes for the same period.

During 2013-14 season, the country had produced 24.4 million tonnes sugar and exported 2.11 million tonnes.