New Delhi: The sugar industry has expressed dissatisfaction with the government’s export incentives, saying a Rs100 per tonne extra subsidy for mills in northern region as compared to those for coastal areas was not enough.
“Freight difference between non-coastal and coastal states is Rs500-600 a tonne while the government is giving only Rs100 extra subsidy for mills in north India,” officials in an industry body said, but declined to be identified.
The government should either have provided for the actual difference in freight cost or kept a single rate for all sugar factories in the country, they said, reacting to Agriculture Minister Sharad Pawar’s comments on 27 March that the Centre would give a subsidy on transport cost of shipments.
Pawar had said that as part of a Rs850 crore incentive package, the government would bear Rs1,300 a tonne for sugar exported by coastal states and Rs1,400 by non-coastal states.
“The mills in Uttar Pradesh have the option to export through Kandla and Mundra ports, which cost them Rs900-1,000 per tonne as freight while factories in coastal areas will have to bear Rs300-400 a tonne,” the industry officials said.
So, the export incentives for non-coastal areas should have been in the range of Rs1,800-1,900 per tonne, they added.
However, a section in the industry differed with this view, saying it would hardly make any difference as Uttar Pradesh, the leading sugar producer, does not export much.
“Price realisation by millers in the north is more than southern and western sugar factories. Uttar Pradesh would not be exporting much given its stronghold over domestic market,” an official in another industry association said.
The officials said subsidy on export of raw sugar would help in meeting the total export target (raw and refined) of 2-2.5 million tonnes of in the next one year.