New Delhi, Jan. 16: The cabinet will take a call next week on incentives to export up to 40 lakh tonnes of raw sugar for two years to help the industry, hit by high cane prices and piled-up stocks.
“We have decided to give incentives to promote raw sugar as a new product. Incentives will be given for the export of up to 40 lakh tonnes for two seasons,” food minister K.V. Thomas told reporters after a meeting of an informal group of ministers.
Raw sugar is marginally processed.
The amount of incentives, or subsidy, will be worked out soon, taking inputs from the finance ministry. This proposal may be discussed in the next cabinet meeting, he said.
Officials said the food ministry had proposed an incentive of Rs 2,390 per tonne on raw sugar, with the burden to be shared by both the Centre and state governments.
The panel, however, is believed to have asked the ministry to rework the amount, they said.
The Indian Sugar Mills Association has demanded Rs 3,500 per tonne as incentive.
Export of raw sugar will lead to a loss of Rs 4,500 per tonne as global prices are ruling at Rs 22,500 per tonne against the production cost of Rs 26,500 per tonne, industry sources said.
Traders are of the view that an incentive below Rs 3,500 per tonne is not viable for mills.