The government would not extend export freight assistance to sugar mills beyond September, union agriculture and food minister Sharad Pawar said today.
On August 29, union finance minister P Chidambaram said the government must end providing assistance to sugar exports since enough sugar has been exported out of the country.
This freight assistance of Rs 1,350 a tonne for coastal mills and Rs 1,450 a tonne for non-coastal mills is scheduled to end on September 30.
The assistance was declared to provide support to the industry, which was reeling under pressure as record output induced a 35-40 per cent crash in prices and caused huge loss to the industry.
Shares of sugar companies took a beating at the Bombay Stock Exchange. Bajaj Hindusthan lost 7 per cent to close at Rs 162.80 while Renuka Sugars lost 5.68 per cent to Rs 117.15.
The country is estimated to have shipped record 4.5 million tonnes of the sweetener in the 2007-08 sugar season (October-September).
The food ministry has, in consultations with the cane commissioners of major producing states, arrived at a provisional sugar production estimate of 22 million tonnes for the 2008-09 season (October-September). This is a decline of 17 per cent from 2007-08 production. This has led to firmness in sugar prices.
Prices gained nearly 25 per cent since July to Rs 1,800 a quintal (ex-mill in Uttar Pradesh). However,
