ISMA raises sugar output estimate by 4% to 26 mn tonnes due to good monsoon

India's sugar production has been revised upward by 4 per cent to 26.1 million tonnes in the current marketing year, industry body ISMA on Thursday said while demanding import duty to be doubled to 100 per cent and export duty be scrapped to check falling price.

Indian Sugar Mills Association (ISMA) demanded that the government should scrap 20 per cent export duty to liquidate surplus sugar stocks.

Sugar production of India, the world's second-largest producer after Brazil, stood at 20.3 million tonnes in the 2016-17 marketing year (October-September).

The consumption is estimated to rise to 25 million tonnes from 24.6 million tonnes in this marketing year, which means that there would be 1.1 million tonnes surplus stock that can be exported.

On the basis of satellite images of cane area across the country and trend of yields and sugar recoveries achieved till now, ISMA said it has "revised its sugar production estimates in the current season to around 26.1 million tonnes against the first advance estimates of ISMA of 25.1 lakh tonnes."

"Considering the additional sugar availability expected in the current season of around 10-11 lakh tonnes over the domestic requirement, senior members of ISMA met the officials in the Food Ministry, Government of India yesterday and today," the ISMA statement said.

ISMA made a case for the need to dispose of some of the additional stocks in the current season itself. It also said that the sugar mills are unable to pay cane prices due to fall in prices in view of estimated rise in production.

Sugar prices have started falling below the cost of production and this could lead to cane payment arrears.

"It was agreed by the government that there is a need to take action to control the falling prices, for which some of the stocks could be exported as quickly as possible," ISMA said in a statement.

The government assured that it will soon take steps to ensure that the additional sugar stocks get exported quickly, ISMA claimed.

"Regarding a little bit of fear that some sugar might get imported from Pakistan because of the Government of Pakistan subsidies, ISMA requested for increasing the import duty to 100 per cent, which is the current rate as per the Indian Tariff Act," the statement said.

In 2016, government had imposed 20 per cent customs duty on sugar exports to boost domestic supply, while import duty at present is 50 per cent.