Brazil, Australia to fight India for export subsidy

Sao Paulo – After speculations started over possibilities of India deciding on providing sugar export subsidy, Brazilian and Australian sugar industry groups seem to be unwelcoming towards India’s move and are working to prepare a formal complaint to World Trade Organisation if it materialises.

The two countries perspective on any subsidy provided by India is likely to be a grave threat to a recent price recovery which needs to be addressed at WTO level said Eduardo Leão, executive director at Brazil’s cane industry group Unica, said in an interview, reported Reuters.

While there are no comments from the Indian Trade Ministry, Leao asserted that “We have heard comments that India could launch an export subsidy.” “It is not admissible, we would seek an action from the Brazilian government.”

Raw sugar prices in New York are reported to have recovered slightly in the past few days according to reports.

Meanwhile, Indian officials have said that the country’s sugar exports in no way violate WTO rules since New Delhi does not give any subsidy for overseas sales.

Now speculations are that if things really go down and such an issue is raised at WTO then there will be talks with Australian sugar industry representatives for a joint strategy.

Meanwhile, Australia’s Minister for Trade, Simon Birmingham on Thursday declined to confirm any plans on the supposed complaint.

“It is clear that export subsidies introduced recently by the India and Pakistan governments have contributed to a growing glut on global markets,” Birmingham said.

According to the Australian Bureau of Agricultural and Resource Economics and Sciences estimations, Australia is expected to produce 4.8 million tonnes of sugar crop this year.

“We know the market fell due to a coincidence of large productions in Europe, Thailand and India, but things are improving now, production is falling so we don’t see the need for a export subsidy from India,” Leão said.