Indian Government announces Sugar MAEQ of 60 LMT with export subsidy

New Delhi: As widely expected, CCEA has given approval for providing export assistance of Rs.10,448/MT to sugar mills for the sugar season 2019-20. Government is expected to allocate MAXIMUM ADMISSIBLE EXPORT QUANTITY (MAEQ) quota of 60 LMT to the sugar mills as per their production percentage. The total estimated expenditure of government shall be  ₹6268 crore.

The export assistance will be provided for expenses on back of marketing costs including handling, upgrading and other processing costs, costs of international and internal transport and freight charges on export of up to 60 LMT of sugar limited to MAEQ allocated to sugar mills for the sugar season 2019-20.

According to the press release it is understood that the sugar export subsidy would be directly credited into farmers account on behalf of mills against cane price dues and subsequent balance, if any, would be credited to mill’s account. The subsidy is likely to be in conformity with the provisions of Article 9.1(d) & (e) of Agreement of Agriculture and thus WTO compatible.

As we reported earlier, in wake of surplus sugar production during the sugar season 2017-18 (October – September) and sugar season 2018-19 notwithstanding various measures taken by the Government, the ensuring sugar season 2019-20 is expected to commence with an opening stock of about 150 LMT.

It was a dire need of the industry and demand was coming from all facets of the industry of export assistance. This shall accelerate the exports which started with the beginning of last sugar season and is going to ease the cash flow pressure on the sugar mills.

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