Industry Stunned as India Approves Mega Package to Support Sugar Exports

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The Indian government today approved a contentious A$1.3 billion export subsidy of A$216/tonne to help its sugar industry export more than 6 million tonnes over the next year.

“We are stunned by this development, just days after the WTO formally established Dispute Panels to investigate the legality of India’s sugar subsidies,” said David Pietsch, CEO of the Australian Sugar Milling Council.

“India’s government has approved a massive market distortion.  The amount of sugar involved dwarfs Australia’s total annual raw sugar exports of 3.6 million tonnes,” he added.

CANEGROWERS Chairman Paul Schembri said the adverse sugar price effects of India’s latest move will be felt around the world. 

“This decision by India underlines the vital importance of the WTO process the Australian Government is undertaking with full industry support. We urge those involved to take every opportunity and move as fast as they can to expedite this process.

“The low value of sugar on the world market is weighing heavily on the mood of the industry and particularly on growers and their future plans,” said Mr Schembri.

“Australia is one of the most efficient and lowest-cost producers of raw sugar in the world, but we are struggling to survive this current extended period of below-cost returns,” added Mr Pietsch

“Rather than this attempt to offload raw sugar on an already over-supplied world market, we urge the Indian government to consider alternative solutions, including long-term storage within country and a commitment to reform of its domestic subsidy measures that have contributed to the global sugar glut.”

“This would ease the pressure on both India’s domestic price and the world sugar price. It would also be seen as a constructive response to the legitimate concerns raised in the WTO by the Australian, Brazilian and Guatemalan governments.”

“The Indian Government’s flagrant actions will be subject to an exhaustive and lengthy WTO Panel dispute resolution process,” concluded Mr Pietsch.

 
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