By Thomas Kutty Abraham, Bloomberg
Mumbai: India will give export incentives to sugar producers for a year to prevent a record output from creating a glut in the domestic market.
Sugar makers located in coastal states will receive Rs1,350 ($32) a metric ton, while mills in inland areas will receive Rs1,450 a ton, the Ministry of Consumer Affairs, Food and Public Distribution said in a notification yesterday.
The incentives would be available only to exports made under the “open general license category” between 19 April this year and 18 April 2008, the ministry said.
Being the world’s second largest producer, India’s sugar output will reach a record 26.1 million tons in the year ending on 30 September, according to C. Czarnikow Sugar Ltd. Domestic sugar prices have fallen a fifth in the past year, reducing earnings at India’s top three sugar mills, Bajaj Hindusthan Ltd., Balrampur Chini Mills Ltd. and Shree Renuka Sugars Ltd.
India may export as much as 3 million tons of sugar in the year to September, helped by government incentives, according to a Bloomberg survey of nine company officials and analysts last week.