The Food Ministry has pitched for approval to end the subsidy for raw sugar exports one year earlier. Food ministry has stated that the scheme is being availed only by a few sugar mills and therefore it has moved a note to cabinet to suspend the sugar export incentive scheme by September 2014.
Food Ministry further added that sugar mills in Uttar Pradesh are not getting benefited from the scheme despite the fact that sugarcane arrears are highest at Rs 7,200 crore in the state. Further, many mills have not shown adequate interest in the scheme as they had exported major quantity of sugar before the launch of the scheme in February.
In February 2014, the government has started the scheme to give a subsidy for export of raw sugar up to 4 million tonnes during 2013-14 and 2014-15 marketing years (October-September). As per the notification, the subsidy will be calculated every two months after taking into account the average exchange rate of rupee vis-a-vis the dollar. The government had fixed Rs 3,300 per tonne for February-March and Rs 2,277 per tonne for April-May, taking into account the dollar-rupee fluctuation. The new government had set the export subsidy at Rs 3,300 per tonne for June-July.
India is world's second largest sugar producer and biggest consumer of sugar. India’s sugar production is likely to be at 23.8 million tonnes in 2013-14, as against 25.1 million tonnes in the last year.