InvestorQ : Why has the government cut subsidy on sugar and how would it impact sugar companies?
Archita Jajjoo made post

Why has the government cut subsidy on sugar and how would it impact sugar companies?

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Niti Shenoi answered.
4 weeks ago
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It is true that the government has decided to cut down subsidy on sugar exports from Rs.6,000 per tonne to Rs.4,000 per tonne. However, this is only because of higher sugar prices internationally and hence it will not have any impact on the competitiveness of sugar companies to export sugar to other countries. This is applicable with immediate effect.

Sugar follows a (Oct-Sep) sugar cycle each year. The originally promised subsidy of Rs.6,000 per ton will be applicable only till 19 May 2021 and all sugar export agreements signed from 20 May onwards will have government subsidy of only Rs.4,000 per ton. The target for sugar exports is 6 MT this cycle and it has already contracted 5.7 MT. Sugar subsidies were given as Indian prices were higher than global prices. That changed with rising sugar prices.

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