Supports sugar exporters to reduce stocks in the wake of government-announced subsidies

Mumbai, Ta. October 17, 2019, Thursday

India's sugar mills are aggressively selling their stock of sugar stocks, with the government announcing export subsidies to boost sugar exports from the country. The government has declared a subsidy to support sugar mills who are experiencing financial crisis.

An increase in exports from India could put pressure on global sugar prices, but export subsidies would help the country's sugar mills lose their stocks, a local trader said.

India's exporters have contracted to export 1.8 million tonnes of sugar to Iran during the October-December period. It was also stated that the contract was made at a rate of Rs 5 per tonne on a free on board basis. Besides, a total of 1.5 million tonnes of sugar has been exported to Sri Lanka, African countries and Afghanistan together. Sugar mills are very active in the current year.

In Iran, sugar is sold in rupees. US sanctions prohibit dealing with Iran in dollars. Because of this, Iran has agreed to sell oil against the rupee, but this money can be used by Iran to buy Indian goods.

Sugar exports from Uttar Pradesh are generally low as the expenditure on transporting sugar mills from Uttar Pradesh to the ports is generally low. But Uttar Pradesh's sugar exporters have become aggressive because of the widespread stocks and exports that have been deposited this year, local traders added.

Increasing exports, India's mills are making room for a new season's sugar. The sugar crushing season has begun. The Indian government has approved a subsidy of Rs 1 per tonne for export of 1 lakh tonnes of sugar in the marketing year of 2-3 years.