Joining the demand of the sugar refiners, Bombay Sugar Merchants Association, the body of sugar traders has called for duty free import of raw sugar for millers.
"We are now standing on the verge of very low opening stock of app.42 lakh tons at the time of festival season, when consumption is highest during the season," stated a BSMA letter addressed to the food ministry.
The BSMA said that it wanted to draw attention of the government to thr probable demand supply mismatch that is about to come in the sugar market given the drought situation in cane growing areas of Maharashtra and Northern Karnataka.
Duty Free Import of White Sugar for bulk consumers and food companies as 60% of total production of sugar is consumed by them, it said.
"These units are being more or less under direct control of corporates which are cash rich, having strong logistical network across the world to source the commodity. Also, with the ports network getting stronger in India, local dispatch of imported sugar from outer markets is now an easy task. With duty free imports, the present prices in international market are certainly workable for imports and with the bulk users having their flexibility to use the import window, pressure on domestic prices will ease, " stated BSMA release.
In similar situation in 2010, Government had allowed import of Raw Sugar on condition to be re-exported, when we have sufficient sugar stock.
Government had introduced release mechanism in July 2016 to 31st October 2016. "Rintroduction of release mechanism for sale, supply and dispatch for a limited period, after taking into consideration consumption patterns and trends in the market will keep speculative interest at bay and hence control sugar price," think the traders.
Calling for ban on future trading of sugar, the merchants body has claimed that the NCDEX / MCX exchanges are seldom being used as hedge platforms which they were originally created for. "This has provoked speculative trading and has resulted in unnecessary volatility of prices, making matters worse for the industry as a whole. We propose a complete ban on futures trading," it said.
The BSMA has suggested rollback of additional cess on Sugar.
"Prices are hovering around uncomfortable zone of INR PMT 37500/- Ex-mill , with the crushing season being on and availability of stock being the highest , which reflects a bad situation when festive season starts with very low opening stock, " stated the release.
Source: economictimes.indiatimes.com