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| India likely to import 7.5 MT sugar this season |
| Dilip Kumar Jha / Mumbai Sep 11, 2009, 00:09 IST |
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India will need to import 7.5 million tonnes of sugar to meet the unchanged domestic consumption of 23.5 million tonnes in the 2009-10 sugar season (October-September).
According to the Union Minister of Agriculture Sharad Pawar, the country’s sugar output is estimated to rise a paltry 10 per cent to 16 million tonnes in the ensuing season from 14.7 million tonnes last year. Industry estimates suggest that India will have to increase its import to 7.5 million tonnes to maintain reserves of sugar.
Private sugar mills and government-nominated commodity trading agencies have so far imported 4 million tonnes of sugar (including raw and white) which will be kept as reserves and pipeline inventory. In case the sweetener price rises abnormally high, the government would intervene with its own reserve for which an inventory of at least 4 million tonnes is required. India turned a net importer of sugar in 2008-09 from an exporter in the previous year when the country produced over 26 million tonnes with bumper cane output across the country. As a consequence, the white sugar price in Vashi market hit an all-time high of Rs 35 a kg. Although, government’s timely action on hoarderers, that unearthed sugar into markets to the value of Rs 120 crore, pushed prices marginally down, analysts feel that the domestic supply deficit would continue to keep prices firm.
During 2008-09 crushing season, the industry had a carryover stock of 8.5-9 million tonnes which, along with, 14.7 million tonnes managed to meet the domestic requirement. However, the industry panicked with the committed export shipment of 1.5-2 million tonnes during the year which is reflected on prices now.
The Delhi-based Indian Sugar Mills Association (ISMA) has not yet assessed the cane and sugar production from domestic sources. Samir Somaiya, ISMA president and Managing Director of Godavari Sugar Mills, however, said, “The country would have to import the quantity differences between consumption and production.”
ISMA is likely to present its sugarcane crop estimates and domestic sugar production on November 1 for the crushing season 2009-10.
B J Maheshwari, Wholetime Director and Company Secretary of Dwarikesh Sugar Industries said the lower domestic sugar production is a cause of concern as high prices may not affect consumption at all.
Meanwhile, ISMA has urged the Ministry of Agriculture to allow jaggery and khandsari units to start crushing sugarcane only in January, two months after the normal commencement of sugar mills. This is required as jaggery and khandsari mills manage to extract only 70 per cent of sucrose content from cane due to age-old state-of-the-art technology. Thus, 30 per cent of sucrose content is lost. A country which is running short of sugar availability should immediately stop such losses, said Maheshwari.
Secondly, a huge quantity of cane supplied to the jaggery and khandsari units is passed on to manufacturers of illicit liquor which also needs to be stopped, he added. About 75 per cent of the cane produced in the country is supplied to sugar mills while 15 per cent goes for jaggery and khandsari production. The remaining 10 per cent is utilised for juice making and seeds for the next season. The country’s cane production touched 289.23 million tonnes in 2008-09 against the demand of 275.91 million tonnes.
However, the impact of sudden upward revision in the statutory minimum price of sugarcane from Rs 81.18 a quintal to Rs 108 a quintal is likely to reflect in next season. Planning Commission estimates cane production at 305.51 million tonnes during 2011-12.
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