The government would not extend export freight assistance to sugar mills beyond September, Union Agriculture and Food Minister Sharad Pawar said on Friday.
On August 29, Finance Minister P Chidambaram had said the government must end assistance to sugar exporters since enough sugar had been exported out of the country.
The assistance, of Rs 1,350 a tonne for coastal mills and Rs 1,450 a tonne for non-coastal mills, is scheduled to end on September 30. It was aimed at providing support to the industry, which was reeling as record output induced a 35-40 per cent crash in prices and caused huge losses.
Shares of sugar companies took a beating at the Bombay Stock Exchange on Friday with Bajaj Hindusthan losing 7 per cent to close at Rs 162.80, while Renuka Sugars lost 5.68 per cent to end the day at Rs 117.15.
The country is estimated to have shipped a record 4.5 million tonnes (mt) of the sweetener in the 2007-08 sugar season (October-September).
The food ministry has, in consultations with the cane commissioners of major producing states, arrived at a provisional sugar production estimate of 22 mt for the 2008-09 season, a 17 per cent decline from 2007-08. This has led to firm sugar prices.
Prices of the commodity gained nearly 25 per cent since July to Rs 1,800 a quintal (ex-mill in Uttar Pradesh). However, concerned over high inflation, currently at 12.1 per cent, the government released additional 500,000 tonnes to cool prices, which pulled down prices by 6-7 per cent.
© 2026