RALLY OF SUGAR STOCKS IN INDIA

Government initiatives

The government introduced few schemes to liquidate surplus stocks and bail out the cash-starved sugar industry, which is facing a glut-like situation.

• The minimum selling price of the sweetener has been increased by 7%
• The import duty on sugar has been doubled to 100% and the 20% export duty has been scrapped off. Along with this a production assistance has been given which will help the sugar mills to clear their dues to sugarcane farmers.
• The government has made it compulsory for millers to export two million tonnes of sugar even as the global prices were low and is exploring possibilities to export raw sugar to other Asian countries. This export push initiative will enable the country to grab market share, dispose the surplus stock pile as well as narrow the trade deficit.
• The government announced a series of soft loans to boost the industry;

1. Soft loan of Rs 12,900 crore for sugar mills for ethanol capacity.
2. Separate soft loan of Rs 2,600 crore to molasses-based standalone distilleries to  expand capacity and set up new units.
3. Soft loan up to Rs 10,540 crore to help mills clear rising arrears to cane growers.

• Under the Ethanol Blended Petrol Programme (EBP Programme) the government has directed the oil marketers to target 10% blending of ethanol with petrol. Thus, increasing value addition in sugar industry. The procurement price of ethanol derived from 100 per cent sugarcane juice has been raised.