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Thomas urges sugar mills to modulate output

Minister says export market does not want plantation white sugar

BS Reporter  |  New Delhi 

Food Minister K V Thomas on Wednesday said he was unable to understand why the industry produced more sugar than required for the domestic market and exports.

Addressing the opening session of the 79th annual general meeting of the Indian Sugar Mills Association, Thomas said the industry should modulate its product mix to ensure there was no glut. “Sugar mills need to diversify their product mix. They have to produce what the market wants. For instance, the export market does not want our plantation white sugar. The demand is for refined sugar and raw sugar,” he said. Sugar mills, especially small and stand-alone ones, had to realise merely producing sugar wouldn’t help; unless mills diversified, they would keep facing hurdles, they added.

India’s sugar sector has been seeing difficult times, owing to surplus production, huge unsold stocks and mounting sugarcane arrears to farmers. About 70 of the 100 big private mills in Uttar Pradesh, the country’s second-largest sugar-producing state, suspended operations for 10 days, saying these were unable to pay the price fixed by the state government. After prolonged negotiations, the mills started functioning. The central government has constituted an informal group of ministers under the chairmanship of Agriculture Minister Sharad Pawar to finalise a bailout package for the sector.

Thomas said, “While the contribution of state advisory prices of cane to the higher cost of Indian sugar manufacturing cannot be denied, at some level, let us understand and agree cost-cutting through reduced remuneration to farmers isn’t a sustainable, long term solution.”

On the proposed bailout package, the minister said the government was expected to decide on the issue before Christmas. The package includes Rs 7,200 crore of interest-free bank loans to pay dues to sugarcane growers. Besides interest free loans, the package also includes recasting of loans taken by mills, incentives to produce four million tonnes of raw sugar, setting up a buffer stock and doubling ethanol-blending in petrol to 10 per cent.

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First Published: Wed, December 11 2013. 22:34 IST