Financial Daily from THE HINDU group of publications
Friday, Dec 24, 2004
Financial Daily from THE HINDU group of publications Friday, Dec 24, 2004 |
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Agri-Biz & Commodities
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Sugar Pawar rules out import of white sugar Our Bureau
SWEET TALK: The Union Finance Minister, Mr P Chidambaram, with the Union Minister for Agriculture and Food, Mr Sharad Pawar, at the 70th AGM of the Indian Sugar Mills Association in the Capital on Thursday. - Kamal Narang
New Delhi , Dec. 23 THE Union Agriculture Minister, Mr Sharad Pawar, on Thursday said there was "no question" of the country having to import white sugar in the coming months to tackle any likely shortfall in domestic availability. Speaking to presspersons on the sidelines of the 70th annual general meeting of the Indian Sugar Mills Association (ISMA) here, Mr Pawar said the country could always import raw sugar to bridge any possible demand-supply gap. Towards this, the Government had already allowed duty-free import of raw sugar against advance licences, with mills being given the flexibility to refine it for sale in the domestic market. While the obligation to export white sugar within 24 months of undertaking imports remains, this would, however, be on a "tonne-for-tonne" rather than "grain-for-grain" basis. In other words, there is no necessity for mills to export white sugar that is processed from the imported raw sugar. Mr Pawar said during the current sugar year (October-September), 8.01 lakh tonnes (lt) of raw sugar had been imported or contracted as on December 15, with advance licences for Rs 1,075 crore (cost, insurance, freight value) being issued. The Minister endorsed the industry's estimate of 15 lt tonnes of raw sugar imports taking place during the 2004-05 season, over and above the 10 lt imported in the preceding season. Mr Pawar's ruling out any prospect of importing white sugar comes, even as a section of the trade believes that ex-factory sugar prices would cross the Rs 20 per kg mark in the coming months. And with elections in State assemblies due, the Government may even be left with no option but to reduce or perhaps do away with the import duty on white sugar, currently 60 per cent. In fact, the dilemma that could well arise for the Government in the days to come was best summarised by the Finance Minister, Mr P. Chidambaram, who was the Chief Guest at ISMA's AGM. "When politicians go to rural areas, they plead for higher prices of cane, but when they return to the cities, they plead for lower prices of sugar," he pointed out, adding that the challenge before the Government was to strike a "fine balance" between the interests of sugarcane growers, sugar mills, consumers and international market. The benchmark No. 11 raw sugar futures at the New York Board of Trade (NBOT) for March 2005 closed on Wednesday at 8.85 cents per pound or about $ 195 per tonne free-on-board. If one adds freight cost of around $ 55 per tonne from Brazil, the landed cost in Mumbai would work out to roughly $250 per tonne. On the other hand, the current landed cost of white sugar is reckoned at around $ 310 per tonne, which translates into Rs 13.60 per kg. However, since whites attract a 60 per cent import duty, it is not viable for bringing in white sugar in the present scenario. Mr Pawar felt that international raw sugar prices have eased somewhat now and "I hope the industry exploits this to the hilt in the wider interests of the nation".
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