Cane farmers may gain from exports.

A recent pick-up in sugar exports is expected to help millers settle the cane arrears of farmers. The government gives millers an export subsidy of ₹10,448 per tonne, which should be transferred directly to the bank accounts of farmers to settle arrears.

“The more the exports, the faster farmers get their arrears,” said a senior food ministry official.

Mills have so far contracted export of 2 million tonnes. This has raised hopes of achieving the targeted exports of 6 million this year. “Global sugar prices in the range of $300-$350 per tonne will help Indian exports,” the official said.In the new sugar season that started in October, industry estimates cane arrears to be around ₹4,500 crore, with more than ₹3,000 crore pending towards farmers in Uttar Pradesh, the largest sugarcane producing state. As crushing has begun in the new season, dues have mounted. “There is firm demand in the global market,” said Abinash Verma, director general of sugar industry lobby group ISMA.\

The international market may require 3-3.5 million tonnes of sugar from India. There is also fresh demand of 7-8 lakh tonnes from Iran-.“So, in the current market conditions, exporting 4.5 million tonnes of sugar looks quite possible,” he said. Last year, the government had asked millers to export 5 million tonnes, but they managed to achieve 3.7 million tonnes. “This year, millers are expecting demand from Indonesia, which has shown interest in buying Indian sugar in lieu of promoting its palm oil exports to India,” said a trade official who did not wish to be named. Indonesia buys sugar from Thailand and Australia.

“If the business shifts to India, then the target of 6 million tonnes could be achieved,” he said. This year, sugar output is likely to be touch 26 million tonnes – down 21.5 per cent from last year. The output is just enough to meet the annual domestic demand. However, a record carryover stock of 14.5 million tonnes allows millers to export aggressively so that the current year ends with surplus of about 9 million tonnes.