Govt cuts subsidy on sugar exports to Rs 4,000/tonne from Rs 6K

New Delhi: The Centre on Thursday slashed subsidy on sugar exports from Rs 6,000 per tonne to Rs 4,000 per tonne with immediate effect in view of firm global prices.

For the ongoing 2020-21 marketing year (October-September), the government had fixed a subsidy of Rs 6,000 per tonne to facilitate exports, thereby improving the liquidity of mills and enabling them to clear cane price dues to farmers.

Sugar mills were mandated to export 6 million tonne of sugar in the current year. So far, 5.7 million tonne of the sweetener has been contracted for export. "Keeping in view of firm global prices of sugar, we have reduced subsidy on sugar exports by Rs 2,000 per tonne to Rs 4,000 per tonne with immediate effect," Joint Secretary in the Food Ministry Subodh Kumar said.

The ministry has issued a notification in this regard on May 20. And the reduced subsidy rate will be applicable to export agreements executed on May 20 or later, he said.

There won't be an impact of this decision on sugar exports from India, he added.

Observing that there has been a steady increase in global prices of sugar because of likely shortages in the world market, Kumar said, "If there is a further increase in global prices, we will further reduce the subsidy".