India needs to import another 2 million tonnes (MT) of sugar in 2009-10 season to meet the domestic demand, an industry body said on Monday.
“The country has contracted to import 3.8 million tonnes of sugar so far this season, of which, 1.8 million tonnes have arrived,” Indian Sugar Mills Association President Sameer Somaiya said.
Besides, the country has an opening stock of 1.5 million tonnes of imported sugar, taking the total availability of the sweetener from the overseas market to 5.3 million tonnes.
“The gap between domestic demand and supply is 7 million tonnes. So, we need to import another 2 million tonnes of sugar in the next nine-and-half months,” he said.
Somaiya said India’s sugar output is estimated at a little lower than 16 million tonnes in 2009-10 (October-September), while the domestic demand is pegged at 23 million tonnes.
In order to curb rising sugar prices, which have doubled in last one year at Rs 40 a kg, the Centre allowed imports of raw and refined sugar at zero duty from April to augment domestic availability.
When asked about the closing stock of current season, Somaiya said it would remain at the same level (about 3 million tonnes) as last season.
The industry reiterated its demand to de-control the sugar sector, but was silent on the issue of reservation of sugarcane area to them. The Centre protects mills through assured supply of sugarcane by reserving 15 km of area within the radius of a particular mill.
On cost of sugar production, ISMA Vice President Vivek Saraogi, who is set to become the body’s President from tomorrow, said the effective cost comes out to Rs 30-31 a kg.
The price has been arrived at after taking into account 20 per cent of sugar produced supplied to the Centre at lower rates to run public distribution system (called levy sugar).
Noting that the current ex-mill sugar price in Uttar Pradesh is at Rs 32-34 per kg, Saraogi said mills need at least 10 per cent profit for their viability.
Asked about price outlook since sugarcane price has moved to Rs 22-24 a kg from Rs 15-16 last year, Somaiya said the domestic rates would be influenced by international market.
ISMA President denied that mills have profited much in 2008-09 season as sugar prices rose to Rs 40 kg, while they had purchased cane at Rs 160 a quintal. The average realisation was Rs 21 a kg as sugar price was not Rs 40 all through the season, he said.
The industry demanded “level playing field” vis-a-vis imported sugar.
Elaborating on this, Somaiya said bulk consumers like biscuit makers and beverage manufacturers have been exempted from 15-days stock limit order for their duty-free imported sugar, but they cannot buy domestic sugar for more than 15 days of their requirement.
Bulk consumers constitute about 60 per cent of the total domestic demand.
Source : Business Standard