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Wait for subsidy holds up sugar exports

Wait for subsidy holds up sugar exports
PTI
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First Published: Mon, Apr 09 2007. 12 00 AM IST
Updated: Mon, Apr 09 2007. 12 00 AM IST
New Delhi: Sugar exports have virtually come to a halt with millers reluctant to enter into fresh contracts with importers because the government is yet to get a verdict from the Election Commission on a decision to to give incentives to the sector.
“Exports are not taking place as millers are still waiting for an official announcement of the package,” an official from a sugar firm having a substantial export obligation said.
The Cabinet Committee on Economic Affairs, which decided to give export subsidy to the sugar sector, had referred the matter to the Election Commission for clearance due to the model code of conduct in effect for the ongoing assembly polls in Uttar Pradesh.
“Sellers are in a wait-and-watch mode following indications by the government on giving an export subsidy,” said Rakesh Sharma, an analyst at K S Commodities.
Sharma said the sellers would prefer to wait for a formal announcement on the incentives so that they can get compensation for falling international prices.
Some of the sugar mills have even opted for delaying their export release orders, originally valid only for two months, the official said.
However, he said the incentives would not benefit the millers much as the global market would discount the subsidy factor.
Foreign buyers are asking for a price below $300 (Rs12,900) per tonne on reports of the government giving export subsidies, market sources said, adding they were earlier offering $305-310 per tonne.
Exports during the current sugar season ending September 2007 were expected to be around 10 lakh tonnes, the sources said.
However, shipments would be affected due to monsoon rains during June-August, the market sources added.
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First Published: Mon, Apr 09 2007. 12 00 AM IST
More Topics: Money Matters | Commodities |