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Govt may extend freight subsidy for sugar exports

Agriculture Minister Sharad Pawar said that the government could extend freight subsidies for domestic sugar mills, reports Deepak Joshi.

business Updated: Dec 21, 2007 22:27 IST
Deepak Joshi

Agriculture Minister Sharad Pawar said on Friday that the government could extend freight subsidies for domestic sugar mills, which are eyeing exports, for another year beyond their planned expiry in April 2008. The move is expected to help the industry liquidate surplus stock on expectations of a record output of over 30 million tonne in the 2007-08 season.

“It looks like we have already crossed about 1.5 million tonnes of export. If this trend continues, we would definitely give serious thought to an extension by another one year,” Pawar said on the sidelines of the 73rd annual general meeting of the Indian Sugar Mils Association (ISMA).

The export sops announced by the Centre early this year are valid till April, 2008. It is defraying internal transport, handling and marketing charges and ocean freight on sugar exports at Rs 1,350 per tonne for mills located in coastal areas and Rs 1,450 for non-coastal states.

Earlier, addressing the ISMA meeting, Pawar said the Centre would make efforts to persuade state governments not to announce irrationally high state advised prices for sugarcane. “We held detailed talks with ministers of some of the key sugar producing states in October 2007… The response was positive. But considering the sensitive nature of the matter, firm commitments and conclusive decisions could not be taken,” he added.

Pawar urged sugar mill owners to allay the fears of the oil industry that it would not get ethanol in a time of sugarcane shortage. “With increased confidence of the country over the capability of the sugar industry to meet the demand for ethanol over a longer period of 3-4 years, the country could move forward to increase the blending percentages further from 10 per cent,” he said.

He said the department of consumer affairs is working on Bureau of Indian Standards (BIS) standards for 10 per cent ethanol-blended petrol and guidelines will be finalised by March, 2008. On the issue of taxes imposed on ethanol by the states, he said, “We are trying to work out a solution with the states so that ethanol production, movement, blending and sale are smooth and convenient.”

Referring to industry’s demand for raising the minimum distance from 15 km to 25 km for setting up a new sugar factory, the minister said sugarcane farmers want more sugar factories in the given area so competition among sugar factories increases and they get better prices, he said.