India adds other sugar subsidies
Despite India attracting litigation from WTO members for its sugar subsidies, the cabinet has approved the decision to provide incentives of Rs 62.68 billion to export 6 million tonnes of sugar in 2019/20 starting from Oct. 1. The subsidies have been designed to reduce surplus inventories. Global sugar prices are already pegged at their lowest level in 11-months, thanks to the supply glut caused by years of bumper cane harvests. The depressed prices are making it hard for mills to pay money owed to farmers.
However, some industry insiders feel that these subsidies are not enough and may fail to boost sales. “To achieve a target of 6 million tonnes, prices need to recover above 13 cents,” said a Mumbai-based head of a global trading house.