PUNE: Indications are that India could end up importing between 8 and 12 million tonne of sugar during the 2009-10 sugar season which begins in October. An official of the state government, concerned with the sugar industry, speaking on condition of anonymity, said imports of this magnitude will be needed for the country to tide over the shortfall.
“The one-million tonne carry forward stock in the country is just a month’s consumption, although the Central government claims the carry forward stock is between 1.2-1.5 million tonne. Sugar mills are likely to produce 13-14 million tonne in the 2009-10 sugar season, so sugar availability in the country is likely to be 14-15 million tonne. Our total sugar consumption is projected at 22 million tonne, so the shortfall, which could range between 8-12 million tonne, will have to be met through imports,” the official said.
The sugar industry has been talking of raw and white sugar imports of 5 million tonne to meet demand. Recently, Prakash Naiknavare, managing director, Maharashtra Rajya Sahakari Sakhar Karkhana Sangh, the federation governing the state’s cooperative sugar mills, confirmed this.
“For the sugar season 2009-10, the opening stock will be 1.8 million tonne, new sugar production across the country will be 16 million tonne and with 5 million tonne of imported raw and white sugar, we should have 22.8 million tonne of sugar. With domestic sugar consumption of around 23 million tonne, the position is tight,” Mr Naiknavare said in Pune last week.
The state government official said sugar imports in 2009-10 were a self-created problem since the Central and the Maharashtra governments continued to give export subsidies after March 2008, despite it being clear that sugarcane production in 2008-09 was short of target. If sugarcane production in 2008-09 was poor, the coming season is going to be worse, he added.
“There is a report by a former sugar commissioner, placed before the state government in March 2008, recommending a ban on the export subsidy. The recommendation was based on the poor outlook for sugarcane production in the 2008-09 season, starting October 2008.
The state government upheld the export subsidy saying that the Central government had extended the date for export subsidies but the objection was that the Central government policy applied to the entire country, while Maharashtra’s subsidy was for just one state. Between March-September last year, mills in the country exported 12 million tonne sugar since they were getting subsidies. This is nearly the exact amount of shortfall expected in the 2009-10 season which will have to be met via imports,” he said.
Pointing to rising sugar prices, the official said prices have been shooting up in anticipation of shortage. “If the subsidy, hence exports, had been stopped in March 2008 as was suggested in Maharashtra, we would have seen sugar at Rs 25 per kg now, instead of nearly Rs 40 per kg.
Mills from Maharashtra exported 6-7 million tonne, which is half the total exports from the country, in the March-September 2008 period,” the official remarked. A timely ban on exports, whether free or obligation-linked, should have been brought in March 2008, he said.
Kanhaiyalal Gidwani, spokesperson of the Congress, said he has been urging the state government to stop the export promotion subsidy. “In 2005, when there was surplus production, we had urged that exports be allowed so that stocks could be liquidated and the carrying costs for mills reduced. Since 2007, we have been saying there is no need for an export subsidy,” Mr Gidwani said.
Source : The Economic Times