NEW DELHI (Commodities Control) –Reduction in subsidy on sugar exports may not disappoint domestic sugar industry as around 57 lakh tonnes of the sugar has already been contracted for export and only a small quantity of three lakh tonnes from the quota fixed for sugar export under Maximum Admissible Export Quantity (MAEQ) at 60 lakh tonnes for the current season 2020-21 (October-September) is remaining for export-deal.
Union government on Thursday reduced the subsidy on sugar exports from Rs 6,000 per tonne to Rs 4,000 per tonne with immediate effect looking upward movement in global prices of the sweetener.
Sugar mills hardly suffer any major loss as they have already exported over 57 lakh tonnes of sugar and changed subsidy will be applicable for only the remaining quantity of the quota of 60 lakh tonnes for the current season, says industry experts.
However, Sugar stocks tumbled to 5 per cent on the local exchanges during the trade on Friday amid negative sentiments due to the reduction in sugar export subsidy.
Managing Director & CEO · Indian Sugar Exim Corporation ( ISEC) Adhir Jha said slashing subsidy on export of sugar will not impact the export of the sweetener as subsidy for export of sugar through road was Rs 4000 per tonnes and through sea route it was Rs 6000 per tonnes, and sugar export over land will intensify.
Sugar will be dispatched to Bangladesh, Nepal and Afghanistan through road routes now, said the industry expert.
The central government fixed a subsidy of Rs 6,000 per tonne for the current sugar season 2020-21 to facilitate exports. The reduced subsidy rate will be applicable to export agreements executed on May 20 or later, as per the decision taken by the government.
PRAKASH NAIKNAVARE, Managing Director at India's National Sugar Federation (NFCSF) also said reduction in sugar subsidy will not affect export of the sweetener from the country as the mills have already reached the contracts for export of 57 lakh tonnes from the quota.
Sugar prices in the international market was $453.40 per tonne (London Sugar) on Thursday which will be in Indian currency at 3,310 per 100kg, higher than Minimum Selling Price (MSP) fixed by the government at Rs 3,100 per 100kg.
Sugar Prices were steady on Friday in Maharashtra, a major producer of the sweetener in the country. As per the Bombay Merchant Association, Sugar grade-s was priced at Rs 3,162-3,242 per 100kg while grade-M at Rs 3,222-32,42 per 100kg. Naka delivery rate for grade-S was 3,140-3,190 per 100kg while grade-M at Rs. 3,190-3,230 per 100kg.
Raw and white sugar prices are ruling high in the global market as supply of sugar from Brazil is weak as the country has diverted its sugar for ethanol production.
Sugar mills across the country have produced 303.60 lakh tonnes of sugar between 1st October 2020 and 15th May 2021. This is about 38.28 lakh tonnes higher than 265.32 lakh tonnes produced at the same time last year. However, as compared to 63 sugar mills which were crushing sugarcane on 15th May 2020, 44 sugar mills are crushing sugarcane on 15th May’ 2021 this year.
As per information furnished by mills and estimations made by Indian Sugar Mills Association (ISMA), total sales in the month of April,2021 was recorded as 23.13 lakh tonnes against the sales quota of 22 lakh tonnes for the respective month. Total sales in the current season upto April, 2021 are estimated at 152.61 lakh tonnes against domestic sales quota of 147 lakh tonnes given by the Government. Last year, during the same period sugar sales were estimated at 146.80 lakh tonnes as against sales quota of 144 lakh tonnes. This would mean that sales in the current year upto April,2021 are 5.81 lakh tonnes higher or about 4% higher than the last year corresponding period.
ISMA projected 302 lakh tonnes of sugar production in the country in its second advance estimates in January and Considering an opening stock of about 107lac tons on 1st October 2020, domestic consumption of 260lac tons, sugar exports of 60lac tons (as per MAEQ for 2020-21 SS), the industry body had expected the closing stocks as on 30th September, 2021 is expected to be much lower at around 89 lak tonnes but production of the sweetener has increased from previous estimates.
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