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Absence of export subsidy may hit raw sugar output

INDIA will not be producing the raw variety of sugar this year as scrapping of an export subsidy by the government and low global prices make overseas sales unprofitable.

"International prices are not viable for exports from India," Mr Abinash Verma, Director-General of Indian Sugar Mills Association (ISMA), said, adding that it is unlikely raw sugar would be produced without any government support.

Brazil, Thailand and Australia—other major exporters of the sweetener—are likely to gain from India’s absence in the global raw sugar market.

According to ISMA data, India, the world’s second-biggest sugar producer, shipped 1.2 million tonnes (mt) of raw sugar in the year ended September. This includes the 700,000 tonnes shipped with financial incentives from the government. A total of 2.2 mt of the sweetener was shipped last year.

India announced a subsidy for raw production and exports in February to help mills clear arrears to cane farmers. The move was opposed by Brazil and Thailand and the incentive of Rs 3,371 ($55) per tonne wasn’t extended beyond September.

Earlier, the Food Ministry had announced incentives for exports of 4 mt of raw sugar during the 2013-14 and 2014-15 seasons.

Source : Exim News Service - NEW DELHI, Oct. 30

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