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Explore possibilities of sugar export: PM Modi
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SME Times News Bureau | 03 Aug, 2015
Prime Minister Narendra Modi on Saturday called for higher ethanol
content in petrol and a concerted effort to push exports in a bid to
lower the current sugar surplus and protect the interests of farmers to
whom factories owe an estimated Rs.15,000 crore in cane arrears.
"Taking
note of the current supply-demand issues with regard to sugar, the
prime minister called for assiduous efforts to increase ethanol blending
of fuel. He also called for exploring all possibilities for export of
sugar," an official statement said, after a high-level meeting here.
"The
prime minister also reviewed the progress with regard to the Rs.6,000
crore incentive package approved by the union government in June 2015,"
the statement added, referring to the soft loan extended to sugar mills
so that they can clear the arrears to farmers.
"The prime
minister emphasized that the farmers' interest be kept foremost at all
times and issues related to sugar sector be monitored regularly.
Long-term measures with regard to the sector were also discussed."
Among
those at the meeting were Finance Minister Arun Jaitley, Agriculture
Minister Radha Mohan Singh, Food Minister Ram Vilas Paswan and Commerce
Minister Nirmala Sitharaman, besides senior officials from their
ministries, Niti Aayog and the Prime Minister's Office.
The
meeting also came against the backdrop of the Indian Sugar Mills
Association (ISMA) estimating the sugar production during the sugar
season 2014-15 (October to September) at 28.3 million tonnes and another
28 million tonnes in the next season, besides a carry over of 10
million tonnes.
As a result, supplies have outstripped demand for the fifth straight year. The annual demand is around 25-26 million tonnes.
The
sugar mills have warned that if the surplus stocks are not reduced,
they may be forced not to start crushing cane in the upcoming season,
beginning October 1. But analysts feel the situation was unlikely to
improve soon.
"ICRA expects that given the continued sugar
surplus scenario in the domestic market and limited possibility of
exports in face of falling international sugar prices, domestic sugar
prices will continue to remain under pressure in the near term," aid the
ratings agency in its latest report.
"Sugar mills are likely to
liquidate their sugar stocks at low prices following pressure from
various state governments to clear the high cane arrears," it said,
while also adding: "Government support and rationalization of cane
prices will be key factors for restoring the financial health of sugar
industry."
In the past few months, besides the soft loan of
Rs.6,000 crore, the government has raised the import duty on sugar from
15 to 40 percent, increased the export subsidy to Rs.4,000 per tonne and
raised the level of ethanol blending in petrol to 10 percent.
The
government also allowed the export of additional 2,095 tons of raw
sugar to the US under the tariff rate quota, under which imports there
attract a relatively lower customs duty. Prior to that, 8,424 tonnes of
raw sugar had been notified for export to the US.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
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66.20
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64.50 |
UK Pound
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87.50
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84.65 |
Euro
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78.25
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75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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