The sugar sector is likely to see a turnaround this financial year, owing to an estimated increase in cash flow, following the export incentive scheme for raw sugar being extended till September 2015.
For every tonne of raw sugar export, the government offers Rs 3,300 as subsidy to sugar mills. For this financial year, the Centre has set an overall export target of four million tonnes (mt).
Back-of-the-envelope calculation shows the proposed extension in export subsidy will increase the sugar sector’s cash flow by Rs 13,200 crore. Of this,Rs 1,200 crore is estimated to go directly to farmers, while the remaining Rs 12,000 crore will go towards sugar mills, depending on their subsidy-refund claims.
“India’s sugar sector will turn around this year, provided mills are able to export the entire allocated quantity of four mt at prices higher than the prevailing rates in Indian markets,” said Abinash Verma, director-general, Indian Sugar Mills Association.
Source:- business-standard.com
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