The subsidy would be offered only on the quantities for which the organisation had floated a tender on June 30, ISIGIEC sources said.
The subsidy would be entirely borne by the corporation, a joint venture between Indian sugar manufacturers association and national federation of co-operatives sugar factories, from its reserves.
"The industry through ISIGIEC has decided to bear the subsidy now as the government has ruled out any allocation from the exchequer on sugar exports," the sources said adding government would not make any commitment for exports until some quantities were physically shipped.
This would also convince the ministry of consumer affairs and public distribution that the sugar industry was serious to undertake exports, the sources added.
The Rs 100 per quintal subsidy would help in meeting internal transport and handling charges, keeping the net export realisation at Rs 11-11.10 per kg.
The price would be more or less equal to the average all-India price of Rs 11.10 per kg that government is paying for the levy sugar requisitioned during the ongoing sugar season (October-September), the sources said.
This would leave the mills with the option either to export sugar or deliver it as levy for public distribution system, they added.
ISIGIEC had floated a tender for procuring 2.5 lakh tonnes of sugar for exports, of which, 1.25 lakh tonnes have been earmarked for the western zone sugar factories and 62,500 tonnes each for the southern and northern regions.
The corporation had earlier decided to float export tenders for upto 10 lakh tonnes - five lakh tonnes from the western region and 2.5 lakh tonnes each from southern and northern regions.
ISIGIEC had undertaken sugar exports of 4.34 lakh tonne in 1995-96 and 8.05 lakh tonnes in 1996-97. Exports fell subsequently following crash in world prices, which remained at 160-170 USD per tonne level till February this year.
