Government mulling incentives for raw sugar production: Thomas

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The Union Minister of Food KV Thomas on Thursday said the government is mulling over the idea of providing incentives to boost the production of raw sugar up to 4 million tonne for the purpose of exporting, a Reuter report said.

The government has proposed this move to stop adding to massive mounds of the refined grade which are piling up because of low prices. These incentives would be World Trade Organization compatible and would be applicable for the crop produced in this as well as the next season.

Thomas added that the proposal was revived by a group of ministers under chairmanship of Farm Minister Sharad Pawar and would be placed before the cabinet, but the quantum of incentives hadn't been decided yet.

India is the world's second largest producer of sugar. The opportunity to export raw sugar has only become possible with the rise in sugar refining capacity in Asia and Africa. And if India were to start export of raw sugar, it would eat into the share of top suppliers like Brazil and Thailand. With benchmark prices being at a 3 and a half year low, additional supplies from India could lead to further falls.

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Story first published: Thursday, January 16, 2014, 22:00 [IST]
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