Rs 750 cr bailout ready for sugar cos

For Indian sugar with high Icumsa, there are few export destinations. The global market was likely to remain tough over the next 18 months, and a subsidy was called for, the sources said. “The Centre is aware of the current situation—that there has been a steep fall in sugar prices at a time when India will have a record sugar production of 240-260 lakh tonne,” an industry source said.

The Centre’s package will be similar to the one announced in 2002-03. The government had provided reimbursement of expenses on internal transport, ocean freight at Rs 350/mt and marketing and handling expenditure at Rs 500/mt that time.

The fresh bailout package is also crucial since domestic realisation is at a lowest Rs 1,250-1,350 a quintal ex-mill, while the average cost of production is Rs 200 a quintal more than that.

Interestingly, Maharashtra, with more than 30 per cent share in the country’s sugar production, has already decided to form an export cell that will become operational from Monday. This cell, to be headed by the state sugar commissioner, will not only monitor the exports from Maharashtra but also finalise deals and route central and state subsidies when they are available.