India Must Scrap Sugar Export Subsidy, Finance Minister Says

By Archana Chaudhary

Aug. 29 (Bloomberg) -- India, the world's second-biggest sugar producer, must stop subsidizing exports of the commodity, Finance Minister Palaniappan Chidambaram said.

``In my view, the subvention given for sugar exports must now come to an end,'' he told reporters in Mumbai today. ``Enough sugar has been exported'' Chidambaram said he has spoken to the ministry of food and agricultural to end the benefit.

India last year announced a freight subsidy of as much as 1,450 rupees ($33) a ton to deplete reserves amid a record crop. The benefit, which was to last until April 19, 2009, will be revoked by Oct. 1, farm minister Sharad Pawar said on Feb. 26.

Mills are forecast to ship 4.5 million metric tons of sugar this year ending September, according to the Indian Sugar Mills Association, a trade body.

To contact the reporters on this story: Archana Chaudhary in Mumbai at achaudhary2@bloomberg.net.