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India may not need to import sugar in the coming year as higher production levels are anticipated during the current crop year (October 2017-November 2018), a sugar industry official said on Thursday.
“Sugar production in the country is expected to be 251 lakh tonnes (lt) and our domestic consumption hovers around 251-252 lt and we already have an opening balance of 39 lt. We do not expect there would be any need to import sugar this year,” said Abinash Verma, Director-General, Indian Sugar Mills Association (ISMA), on the sidelines of the industry body’s annual general meeting.
This estimation is based on the total sugarcane cropping area available currently. This may be revised in January when more reliable data is available, he said. Last year, India imported five lakh tonnes of sugar.
Earlier in her presidential address, ISMA President T Sarita Reddy made a plea for deregulating cane prices made to farmers. Even after the decontrol of sugar sales from April 2013 and sugar prices now being determined by market forces, the price of sugarcane is still controlled and fixed by the government. “This is distorting the market,” she said.
Reddy said there could be a possibility of sugar mills having small surpluses in a year or so and this surplus production may depress domestic prices. This, in turn, may impact the ability of the mills to pay cane prices to farmers, leading to accumulation of arrears.
One way in which this surplus production can be managed is through exports, the ISMA president said. But the prevailing global prices may not be viable for such exports from India as domestic cane prices are the highest in the world.
A way out could be exploring preferential trade agreements with Bangladesh and Sri Lanka, which import 25-30 lt every year, Reddy said
According to Verma, Indian sugar producers have been lobbying with the government to explore the possibility of getting preferential duty rates under the South Asia Free Trade Agreement from Bangladesh and Sri Lanka.
“Bangladesh charges an import duty of $150 per tonne for sugar and Sri Lanka $97 a tonne. We have been making representations to the Commerce Ministry for the past two years,” Verma said.
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