Govt gives in to pressure on sugar export sops

Incentives only till October 1, and not April 18 next year.

The government will extend the sugar export sops till October 1 against its earlier decision to extend it by one year to April 19, 2009.

The review of the earlier decision is said to be done under pressure from sugar exporting countries such as Thailand and Australia. These countries claimed the incentive to be non-compliant with the World Trade Organisation norms.

In March 2007, the government had decided to boost exports by offering an export incentive of Rs 1,350 a tonne on sugar exports for the coastal mills and Rs 1,450 a tonne for non-coastal mills. The export subsidy is currently valid till April 18 2008.

The cabinet, in a decision on October 9, 2007, had approved the extension of the export assistance scheme by one year "" from April 19, 2008 to April 18, 2009 "" to target an additional export of 3 million tonnes of sugar and prevent the country from a glut situation.

Sharad Pawar, the Union food and agriculture minister, met the country's top sugar exporters today.

"The domestic production is more than consumption. Moreover, the international market for sugar is improving and we think this is the time for exports. The industry should take initiatives to export," Pawar said at the meeting.

The country is estimated to have contracted exports of 2.6 million tonnes of sugar since the ban got lifted in January 2007.

Pawar said we should target exporting another 2.4 million tonnes in the current season (October-September).

Industry sources said the minister's nod for an extension till October 1 will mean more contracts for export of sugar. "So far, there was a lack of clarity on whether it would be extended at all beyond April 18 and we were unwilling to enter contracts for shipment beyond this date. Now, shipments can be made till September", they added.