Decision on lifting sugar export ban in 15 days

Food and Agriculture Minister Sharad Pawar today indicated that a decision on lifting the ban on sugar export would be taken in the next two weeks.

"We are seriously considering lifting the sugar export ban in the next two weeks as availability of sugar is not a concern now," Pawar said.

He also announced slashing of interest rates on loans disbursed from the Sugarcane Development Fund (SDF) as well as on those advanced by banks to cooperative sugar mills covered under the credit restructuring package.

"Since a substantial quantity of sugar would be available in the next season, the ban on export would have to be lifted and a decision would be taken at the appropriate time," he said at the Economic Editors' Conference here today. The sugar output this year was expected to rise to around 22.7 million tonnes from last season's 19 million tonnes.

The area under the sugarcane crop had gone up this year because farmers got the highest-ever prices for their cane last year.

"Though this year they may not get that kind of returns, their realisation will not be below Rs 100 to Rs 120 a quintal," Pawar said and added that the cane yield was likely to be good this year because of favourable weather conditions.

The minister announced that the rate of interest on all outstanding SDF loans and fresh loans disbursed on or after October 21, 2004, had been reduced to 4 per cent a year (simple interest).

Besides, the normative project cost for SDF funds had also been revised for projects for bagasse-based co-generation of power from Rs 265 lakh per mega watt to Rs 293 lakh for boiler pressure up to 70 per cent atmosphere (1.03 per kg sq cm) and to Rs 363 lakh per MW for over 70 per cent atmosphere.

The SDF loan component had been stepped up from the earlier 30 per cent of co-generation project costs to 40 per cent, he said.

For the cooperative sugar mills whose loans had been restructured, Pawar announced a reduction in the rate of interest charged by banks from around 14 per cent a year to 10 per cent. The Centre would reimburse about Rs 560 crore to the concerned banks for this purpose.

He claimed that measures taken by the government had helped revive the sugar industry which, in turn, had facilitated timely payment of cane prices to farmers.

In 2005-06, about Rs 19,667 crore had been paid by sugar mills as cane prices to farmers. The outstanding payments came to just Rs 177 crore, amounting to below 1 per cent of the total cane price payable during the season.

The recent rollout of the ethanol blending programme by the government should further strengthen the sugar industry, Pawar maintained.