"Export subsidy on sugar will be till only September 2008 and not beyond that," Pawar said in an interview here. Pawar's comment comes in the wake of industry estimates that sugar production would decline in 2008-09 season (October-September) after two seasons of bumper output.
As per the industry estimates, the sugar production in 2008-09 season would decline to about 22-23 million tonnes, which would be almost close to the domestic demand.
India's sugar production stood at 28.3 million tonnes in 2006-07 and is estimated at about 27 million tonnes in the current season ending September this year.
The industry is facing a glut from 2006-07 season, forcing the government to provide export assistance for liquidating the surplus sweetener in the overseas markets. The government is providing an export assistance of Rs 1,350 per tonne to sugar mills located in the coastal states and Rs 1,450 a tonne for those situated in non-coastal states.
With the help of this incentive, the industry is expected to export more than three million tons of sugar in 2007-08 season. Apart from the export assistance, the Centre has created a buffer stock of 5 million tonnes to bail out the industry, which has incurred a huge loss on account of depressed price.