India likely to withdraw sugar export subsidies from new season

India is expected to withdraw sugar export subsidies from the new season beginning October as a sharp rise in global prices makes it easier for Indian mills to sell the sweetener on the world market, a top government official said on Tuesday.

“The government is not considering any subsidy at the moment for next year,” Sudhanshu Pandey, the most senior civil servant at the Ministry of Consumer Affairs, Food and Public Distribution, told Reuters in an interview.

“Under current circumstances, as we see the scenario, there appears to be no need to have the support of the subsidy. If exports can happen on their own, then it’s also better for the global market that no subsidy is provided,” he said.

India, the world’s biggest sugar producer after Brazil, encouraged overseas sales for three years in a row, helping New Delhi emerge as a significant, stable exporter of the commodity.

Rival suppliers have often opposed India’s sugar export subsidies. After protests from Brazil, Australia, and Guatemala, the World Trade Organization (WTO) in 2019 decided to set up panels to rule on complaints against India’s export subsidies for sugar.

The Australian Sugar Milling Council (ASMC), one of the organizations supporting the WTO action, said last week that there was “widespread concern amongst the world’s sugar producing countries that the Indian government might be contemplating further contentious export subsidies”.

ASMC recently commissioned a report from Green Pool Commodity Specialists, which estimated India’s sugar overproduction between 2017 and 2020 cost Australia’s sugar industry A$1 billion ($724.40 million).

“Green Pool found that the subsidies and global oversupply had forced down the price of sugar on global markets by an average two cents a pound over the four years,” said ASMC Director David Rynne.

India has maintained that its sugar export subsidies do not violate WTO rules.