The Hindu Business Line : Sugar output may dip to 160 lakh t

SUGAR output during the current season may fall to 160 lakh tonnes as against the estimated 177 lakh tonnes this season (November 2003-October 2004) owing to drought in a few sugar-producing States, Mr Mohan Gurnani, President of the Bombay Sugar Merchants' Association said, speaking at the Sugar Summit 2004 here on Friday.

"While domestic consumption has not naturally picked up in proportion to higher production and lower prices, sugar exports were reached 19 lakh tonnes last year, thanks to government's incentives. In the current year, owing to a dip in the international sugar prices, consequent upon better world production, the said figure of 19 lakh tonnes will fall far short. In the ultimate result, the industry will continue to burdened with heavy unsold stocks to nurse," Mr Gurnani said, at the Sugar Summit 2004 organised by the Tefla's Conference and Events Pvt. Ltd in collaboration with the Indian Sugar Mills Association (ISMA) and India Merchants' Chamber (IMC). This is the first kind of event in the sugar industry.

The exorbitant Statutory Minimum Prices (SMP) notified/announced every year for sugarcane (SMP) and the State Advised Prices (SAP) in certain Northern states have crippled the capacity of a majority of the sugar mills to pay their sugarcane dues, rendering a few mills sick and also several out of production, he said.

The accumulated sugarcane arrears during the last two seasons were around Rs 3,500 crore.

Demand growth rate is 4.5 per cent annually, Mr Rajeev Ranjan, Chief Director, Directorate of Sugar, said.

Speaking on `Can India Balance Gap' Mr M. Manickam, Vice-Chairman and Managing Director of Sakthi Sugar Ltd, said: "The pricing of sugarcane should be market driven; the price of sugar should cost driven. One cannot have an option on keeping ones feet in two boats and claiming to be in both camps at different junctures."

India has the land mass and the agricultural potential to achieve the required production of sugar. Sugarcane is the highest paying for the farmers. It is not conceivable that the farmers will opt for other cash crops before satisfying.