Pune: Ahead of new sugar season, millers want clarity on exports

Partha Sarathi Biswas
Mills in state have reported dues worth Rs 1,157.63 crore. (File Photo)

After two consecutive years of bumper production, the sugar industry feels it has enabled India to bolster its image as an exporter of sugar. Ahead of the 2019-20 season, millers have urged the central government to make provisions for export of 50 lakh tonnes (lt) of the sweetener. Rohit Pawar, president of the Indian Sugar Mills Association (ISMA), said finalisation of the export policy will help them make inroads into the Chinese market and also reduce the sugar stocks in the domestic level.

Sluggish sales and record production have put the bottom lines of the industry under severe stress. Ex-mill price of sugar at present is between Rs 3,100-3,120 per quintal, which millers say, has not changed at all in the last year or so. Thanks to a bumper season in Maharashtra, the final sugar production figure at the end of the 2018-19 season for the country is estimated to be 328 lakh tonnes.

India s total sugar availability taking the 104 lt of carry forward sugar at the start of the last season came to 432 lt. With annual consumption of 260 lt and 30 lt of exports taken into consideration, India is to start the next season with 132 lt of unsold sugar another all-time high.

Pawar pointed out how the last two years have seen the country establishing itself as a credible sugar exporter. We are urging the government to set in motion the necessary framework to allow us to export to China, he said. China has traditionally been dealing with Brazil and the Philippines to meet its sugar requirements. India, Pawar and other industry experts say, being a neighbouring country to China has an advantage in terms of easy transportation of sugar. China plans its import calendar in July and we are urging the government to think about this seriously, he said.

Last year, the sugar industry along with other stakeholders had held a series of ice breakers with China to allow import of Indian sugar.
Pawar and experts believe that export was crucial for the price of sugar to rise in the domestic market. June sales have been low and the industry hopes that July and August sales would be better. Last season, the country was given an export quota of 50 lt, of which around 30 lt has been finalised. Without exports, price rise in sugar appears to be slim. Maharashtra is expected to report a 30 per cent dip in sugar production, but the huge unsold stock might not have much effect on prices without exports, Pawar said.

Unpaid dues have reeled out of control with many millers failing to pay even the basic Fair and Remunerative Price (FRP) for the cane they procured from farmers. As of June 15, mills in Maharashtra have reported dues worth Rs 1,157.63 crore. Mills have made payment worth Rs 21,931.72 crore out of the Rs 23,089.35 crore they owed to farmers.