'Rising import is the worst enemy of the sugar sector'

O P Dhanuka, CMD, Riga Sugar Company said higher output of sugar in last season coupled with minimum export has resulted in huge outstanding stock

Rising import and of sugar from Brazil is exacerbating the situation for the sugar mills which are already in deep crisis from low sugar price in the market, a sugar company official told reporters here on Monday.

According to OP Dhanuka, CMD, Riga Sugar Company Limited, despite surplus production of sugar in the country, import in high quantity is taking place which is further pushing the market price down.

“During last two years, 4 million tonnes (mt) of sugar has been imported in to the country but only 1.8 mt has been re exported leaving stocks of 2.2 mt flooding the domestic market,” he said. Dhanuka is also a former president of Indian Sugar Mills Association (ISMA).

He added , the imported raw sugar for re-export is converted in to white sugar by refinery and sold in open market. Beside raising import duty he asked that the imports of raw sugar under advance authorisation scheme to be exported within three months instead of 18 months.

“The sugar that come from imports stands for 18 months during which it is sold in the local market and it is happening at the behest of few politicians,” said Dhanuka.

Higher output of sugar in last season coupled with minimum export has resulted in huge outstanding stock. “The last government gave some incentives on the export of sugar, which the current government has put on hold, the incentive should be continued linked to Rupee value and international market scenario,” he said.

The UPA government had approved of export incentive of Rs 3,300 a tonne to help the industry against falling international price.

The wide gap between cane and sugar price in the country is also pushing the balance sheets mills to red rendering them incapable of paying arrears to the cane growers.“ Sugar is sold at market determined price but sugarcane price is dictated unilaterally by state government without any economic consideration,” said O P Dhanuka.

He added that cost of production of sugar on the basis of State Advise price (SAP) has become Rs 3500 per quintal, where as sugar is being sold at Rs 2,800 per quintal.

He demanded for quick implementation of the recommendation of the Rangarajan Committee. A government committee formed under the C.Rangarajan in 2012, had suggested for linkage between sugar cane price with sugar and its by products.