No subsidy plan for sugar exports

The ministry of food has not prepared any proposal for providing subsidies to sugar companies for facilitating exports.

"We have no subsidy plans for sugar exporters as of now," said a senior official of the department of food and public distribution.

The department monitors and implements various policies of the government on sugar and other commodities.

As falling global sugar prices have rendered exports unattractive, the government could give export subsidy in the form of transport assistance, agriculture minister Sharad Pawar had indicated on January 5.

Meanwhile, the directorate of sugar under the ministry of food has received proposals for issue of export permits of 1lakh tonne under the advance licence scheme.

"We have issued permits of about 37,000 tonne to companies such as Renuka sugar, some south-based mills and private exporters", said a directorate official.

Meanwhile, sugar stocks continued to be bearish, falling consecutively for five days after the government lifted the ban on sugar exports.

While most stocks gained 4-6 per cent on the day after the ban was lifted, most of them have lost 5-7 per cent this week.

Bajaj Hindusthan, for instance, had risen from Rs 201.55 to Rs 209.60 on the day following the ban withdrawal. However, today it closed at Rs 198.80.

"Unless, sugar prices don't recover, both nationally and overseas, stocks will continue to underperform and may remain rangebound for the entire 2006-07 (October-September) season," said Vikram Suryavanshi of Karvy Stockbroking.

Even the Petroleum Minister's announcement today to increase ethanol blending in petroleum to 10 per cent from 5 per cent failed to cheer sugar stocks.

Triveni Engineering and Industries, a leading sugar producer declared its third quarter results yesterday that showed a decline of 12 per cent in the revenues from sugar business.

Domestic sugar continued to trade at Rs 1520-25 a quintal even after the withdrawal, while international prices have declined from $330 a tonne to $326.