In the current sugar season 2017-18, India is expected to produce 261 lakh tonnes of sugar, the second advance estimate of Indian Sugar Mills Association (ISMA) has said. Earlier in the first advance estimate, the sugar body had estimated the sugar production for the season was at 251 lakh tonnes. The estimated sugar production in the current sugar season is significantly higher than the 203 lakh tonnes production in the sugar season 2016-17.
In order to prepare the second advance estimate, ISMA has procured the satellite images of sugarcane area harvested and remaining cane area unharvested in the fields across the country in the second week of January 2018. On the basis of these images of balance area, trend of yields and sugar recoveries achieved till now as also expected yield/sugar recovery in the balance period of sugar season, ISMA has revised its sugar production estimates.
As compared to sugar off-take from sugar mills during last season 2016-17 of around 246 lakh tonnes, it is estimated that the sugar consumption in current year would be around 250 lakh tonnes in the current season. Therefore, as per the revised estimates, India can export some of the additional stocks within the current season itself.
Considering the additional sugar availability expected in the current season of around 10-11 lakh tonnes over the domestic requirement, senior members of ISMA met the officials in the Ministry of Food and Public Distribution, Government of India yesterday and today. The sugar mills body made detailed submissions before the Government about the need to dispose off some of the additional stocks in the current season itself. It was submitted by ISMA that the main reason for the fall in sugar prices in the recent past was the expected sugar production during the current season, which is now looking to be more than the domestic requirement, because of which several sugar mills were under pressure to sell their sugar for revenue generation to pay to the cane farmers.
It was also noted that several sugar mills were unable to pay cane prices to the farmers due to the recent fall in sugar prices which have started falling below the cost of production. Therefore, there was concern about the sugarcane farmers getting affected due to their cane price arrears accumulating.
It was agreed by the Government that there is need to take action to control the falling prices, for which some of the stocks could be exported as quickly as possible. The Government appreciated the problems of the sugar sector and agreed that all steps required to be taken to ensure that the additional sugar stocks get exported quickly, will be taken soon. This could include similar steps as taken by the Government in the past like mandatory sugar exports by each sugar mill in the country. ISMA requested for quick decision in the matter.
Regarding a little bit of fear that some sugar might get imported from Pakistan due to the Government of Pakistan subsidies. ISMA requested for increasing the import duty to 100%, which is the current rate as per the Indian Tariff Act. The Government also appreciated that the country does not need any import of sugar.
The Government also advised the sugar mills that they should not be in a hurry to sell their sugar below their costs, which in turn, will adversely impact the cane price payments of farmers. They advised that there is need for sugar mills to at least try in cover their costs of production because that will determine the timely cane price payments of the farmers.
Efforts are already being made by the industry with the support from the Government, to explore possibilities of getting preferential import duty for Indian sugar by the two important neighbouring countries, namely, Bangladesh and Sri Lanka, who are members of South Asian Association for Regional Cooperation (SAARC) and South Asian Free Trade Area (SAFTA), and can offer such preferential treatment for Indian sugar. If this happens early, it will ensure that all the extra stocks from India can get disposed off very fast.