Dubai: Indian sugar export subsidies are a temporary measure, a senior Indian official said on Monday, 4 February.
“It’s not a long-term policy of the Indian government to subsidize exports,” Nanda Kumar, secretary, Department of Food and Public Distribution, told a sugar conference. “We are seeking to address this issue.”
Kumar was responding to a charge by Marcos Jank, president of Brazil’s Sugar Cane Industry Association (Unica) that India was using “distortive” policy instruments through the use of government incentives and subsidies in its sugar exports.
“The Indian government should consider agricultural policy reforms, such as converting current sugar subsidies into support for bioethanol and bioelectricity,” Jank said. “(And) convert unfair subsidies into green box, non-distortive subsidies.”
India, which has recently emerged as a major sugar exporter, has seized market share from Brazil in some regional markets such as the Middle East, including Dubai’s Al Khaleej refinery, the biggest in the world, traders and analysts say.
Brazilian cane producers believe Indian support for sugar exports is giving Indian exporters an unfair competitive edge.
Jank told Reuters on the sidelines of the conference that he estimated that Indian sugar subsidies would total $170 million (Rs670 crore) in 2008.
“Their (Indian) subsidies are harming our producers in Brazil,” he said.
Centre-south Brazilian cane output is pegged at 426.8 million tonnes in 2007-08, up from 372.8 million tonnes in 2006-07, Jank said. Brazil is the world’s top sugar exporter.
Jank added he expected 55.6% of sugar cane to be used to manufacture ethanol biofuel in 2007-08, up from 50.6% in 2006/07.