HAMBURG, Sept 28 (Reuters) - The Indian government’s new programme to subsidise sugar exports will cause more falls in sugar prices and should be opposed by the European Union, Germany’s sugar industry association WVZ said on Friday.
India’s cabinet on Wednesday approved subsidies to encourage producers to export sugar as part of efforts to reduce large domestic stockpiles. India’s food ministry will encourage producers to export at least 5 million tonnes of sugar.
The Brazilian government also said it was seriously concerned about the plan.
“The WVZ regards the latest price fall on the world market as caused by the new scheme from the Indian government giving incentives for production and exports,” the WVZ said in a statement.
Raw sugar futures fell to a 10-year low on Thursday.
“India’s action will increase over-supply on world markets and lead to a further fall in prices, “ said WVZ chairman Hans-Joerg Gebhard.
“The European Union must take the very strictest action against this,” said Gebhard. (Reporting by Michael Hogan; Editing by Mark Potter)