New Delhi, Dec. 21: The government is likely to extend the subsidy scheme for sugar exports by another year till April 2009 on the back of bumper cane production.

This will help the industry liquidate surplus stock as over 30 million tonnes of cane output is expected during the current season.

“Till now we have exported about 1.5 million tonnes of sugar. If this trend continues we will definitely think of extending the subsidy scheme by another one year,” agriculture minister Sharad Pawar said at an industry meet here today.

Saddled with huge stocks, local mills aim to export 2.5 million tonnes of sugar by September next year.

The export sops announced by the Centre early this year is valid till April next year. It includes 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 mills in non-coastal states.

While inaugurating the 73rd annual general meeting of the Indian Sugar Mills Association (Isma), Pawar said the industry was facing a situation of “very high stocks, low prices and lack of demand”.

With consumption remaining stagnant at about 19 million tonnes, the country is likely to have a surplus of 22 million tonnes in the current season, including an opening stock of about 11 million tonnes from the previous season. The industry is expecting to export 2.5 million tonnes this season, of which 65 per cent will be raw sugar.

According to Isma, the apex industry body, domestic sugar production is estimated to be around 30-31 million tonnes in 2007-08 season ending September next year against 28.3 million tonnes a year ago. Pawar, however, rejected the industry's demand to increase the minimum distance for setting up a new sugar factory to 25km from 15km.