CCEA approves a subsidy of Rs 3,333 per tonne for exports of raw sugar

Finally giving respite to the ailing sugar industry, the Cabinet Committee on Economic Affairs (CCEA) has approved a subsidy of Rs 3,333 per tonne for exports of raw sugar. The move will boost overseas sales and will help the cash-starved industry to pay arrears to sugarcane farmers.The subsidy fixed at Rs 3,333 per tonne was based on current exchange rate and will be valid for February-March and there will be further revision in April with respect to the then exchange rate. The subsidy will be paid through an escrow account.

Indian Sugar Mills Association (ISMA) reacting to the development has said that though, not much time is left for producing raw sugar in the balance crushing period during this season, but the market sentiments may improve with halt in fall of domestic sugar prices and the most awaithed move will give some of the much required liquidity to the sugar mills.

The sugar industry has been long facing cash crunch due to higher cost of production and lower selling prices in the wake of surplus sugar. The PM had appointed an informal group of ministers in November last year, to look in to the issues of sugarcane farmers. But there were differences between the agriculture and food ministries that forced the CCEA to defer the decision on this matter thrice this month.