Direct link to scholarships offered by  Govt. of India

List of Private NGOs offering scholarships

Abu Marwan Abdal Malik Ibn Zuhr: ‘Avenzoar’

Abu Marwan Abdal Malik Ibn Zuhr, known in the west as Avenzoar, was

Ummid Assistant

IGNOU invites applications for online nutrition course

Welcome Guest! You are here: Home » Views & Analysis

Sugar policy must create export surplus, not induce imports

Wednesday February 09, 2011 11:30:06 AM, Abinash Verma , IANS

There is a huge opportunity this year for the sugar industry to sustain a high output. But meaningless controls will only convert the opportunities to threats and create hurdles for stake-holders, including cane farmers at the end of the line.

The industry estimates the production to be around 25 million tonnes during the current sugar year (October to September) and the government's forecast is 24.5 million tonnes. More importantly it is for the first time in recent memory that global prices today are offering substantial premium even though India, the largest consumer and second largest producer, has a surplus.

The world is looking at exports from India and waiting breathlessly for the government to allow unrestricted exports. An important decision was taken mid-December when it was announced that 500,000 tonnes of sugar would be allowed to be exported. Some 500 sugar mills were to benefit from the announcement -- a democratic way to ensure the benefits are reaped by all. As sugar prices then moved up in the latter part of December, the government was quick to respond with two important decisions.

First, it announced a significantly higher quota of non-levy sugar -- the quantum of the commodity which mills are free to retail in the open market, as opposed to selling it to the government for distribution through fair price shops. For January, the non-levy sugar was fixed at 1.7 million tonnes, compared to 1.45 million tonnes during the like months of the previous three years.

Second, it decided to extend the stock-holding limit of 200 tonnes for traders beyond the Dec 31 deadline to March 31 this year. This was another step which the government used to control demand and suppy. As expected, prices started moving down. It also put pressure on sugar mills to sell more in January.

What surprised industry even more was the decision to constitute an empowered group of ministers to decide whether or not to allow exports under open general licence. Despite passage of one month, no step has been taken to even approach the ministerial group.

Meanwhile, sugar prices have slowly but certainly fallen over the past one month. From an ex-factory price of about Rs.3,000 per quintal, prices have dropped by Rs.200 rupees to around Rs.2,800 per quintal. Sugar prices in Maharashtra have fallen to Rs.2,600 per quintal.

The flip side of all this is: Sugar prices are again moving to levels that are unviable for the mills. Experts also say any further fall in prices will put the finances of the sugar mills under greater stress, especially when they are paying very high prices of around Rs.210 per quintal of sugarcane.

In the case of mills in the north, where the sugar recovery is about 9.5 percent, the production cost works to around Rs.2,900 per quintal. This figure is arrived at after considering the returns from the sale of by-products and the loss on account of levy sugar sold to government at Rs.1,850 per quintal. If this present trend persists, it is feared mills can no longer sustain the cane price of Rs.210 per quintal and arrears of farmers could mount.

This is also the time cane sowing season is under progress. Farmers will decide whether or not to continue growing sugarcane, depending on timely payments for their crop. Delayed payments may result in a shift out of cane cultivation sooner than expected and the country may witness a repeat of what it saw during the past two seasons. The country may also have to become a net importer from a net exporter.

The government did not have much choice in 2006-07 and 2007-08 when international sugar prices were lower than domestic prices in India and subsidies were needed to export sugar. That is not the case now. There is a viable global sugar market waiting to welcome exports from India. Revival of the 500,000 tonnes of export under open licence will help the sentiments to improve, ensure better cash flow to the sugar industry and avoid any unnecessary distress sale of sugar. It is in the interest of farmers as well.

Falling sugar prices can also be controlled and made to remain reasonable and viable by improving domestic demand, which can come about by removing the restriction of stock-holding limits of 200 tones on traders and allowing exports of surplus sugar.

On the consumption side, the government was estimating domestic demand at 23 million tonnes. But seeing the releases so far, consumption may not exceed 220 million tonnes by the end of the remaining seven months of this sugar year. With a rather healthy opening balance of 5 million tonnes this year and exports of about 1.2 million tonnes, there is still a surplus of over 1 million tonnes, even if we go by the government's production estimate of 24.5 million tonnes.

The domestic market is probably aware of this significant surplus of 1 million tonnes and that is the reason why sugar prices are behaving the way they are during the past one month, since the time the government decided to postpone a decision on exports.

It is important for the government to act immediately to ensure cane farmers do not suffer on account of mounting arrears. The decision should guarantee timely payments to them and keep them interested cane cultivation so that India not only continues to be self-reliant in this important commodity but also looks at the international market. We should be exporting and not importing sugar.

(Abinash Verma is director general of the Indian Sugar Mills Association. He can be reached at





  Bookmark and Share                                          Home | Top of the Page


Note: By posting your comments here you agree to the terms and conditions of

Comments powered by DISQUS

More Headlines

Egypt crisis continues; Is Mubarak headed for clinic?

South Asia's largest aero show takes off Wednesday

Government makes fresh bid to break parliament stalemate

US suspends bilateral engagements with Pakistan

Guns and stones have given nothing to Kashmir: Minister

Speaker hopeful of way out, opposition parties stick to stand

Results confirm vote for Southern Sudan split

UAE firms to shut on Prophet's birthday Feb 17

Opposition steps up stir against Bangladeshi PM

Census enumeration to start Feb 9

Two Kolkata Metro stations to be named after journalists




Top Stories

Bail plea of Malegaon blast accused: Next hearing on Feb 09

The special Maharashtra Control of Organised Crime Act (MCOCA) court in Mumbai today deferred the hearing on the bail application   »

No evidence against accused arrested in '06 Malegaon blasts case: CBI

Malegaon Blast: Court defers hearing on bail application till Feb 07


Picture of the Day

Hundreds of people February 07, 2011 converged at Mushawerat chowk in Malegaon - one of the site that witnessed a series of blast on September 08, 2006, to listen to Former Minister Nehal Ahmed. Nehal Ahmed addressed the people from atop the Tipu Sultan tower because, according to him, the local police did not give him the permission to hold the rally to press the government to release the Muslim youths arrested in the case.



  Most Read

Egypt crisis continues; Is Mubarak headed for clinic?

The US said Egypt faces a "bumpy" process in its transition to a multi-party democracy as    »

Egypt crisis enters 14th day

Meeting inconclusive, but government may agree on JPC

Indicating that the deadlock in parliament over the opposition's demand for a joint parliamentary committee (JPC) probe into the 2G spectrum scam could finally end, the government Tuesday told political leaders that there was nothing "dearer" to it than letting the house run smoothly.  »


  News Pick

South Asia's largest aero show takes off Wednesday

As India's aerospace hub, Bangalore is abuzz with hectic activity for the south Asia's largest air show, AeroIndia 2011, from Wednesday at the Yelahanka air base on the city's outskirts where fighter jets  »

US suspends bilateral engagements with Pakistan

Scaling up pressure on Pakistan for the release of Raymond Davis, arrested for fatally shooting two Pakistanis in Lahore, the US has put on hold high-level bilateral engagements with Islamabad. The Barack Obama  »

Legislator's rape-accused nephew arrested

Two days after a girl, alleging rape by the nephew of a Madhya Pradesh legislator, went on a hunger strike to protest lack of action in the case, the accused was    »

Girl alleges rape by legislator's nephew, begins hunger strike

Results confirm vote for Southern Sudan split

Southern Sudan has overwhelmingly voted to split from the north and create the world's newest nation, official results released Monday showed. Earlier, Sudan's President Omar al-Bashir said he accepted the    »

Schoolchildren's death: Himachal to conduct surveys

A day after four students were buried alive after a boundary wall of their school collapsed in Himachal Pradesh's Una district, Education Minister I.D.   »

4 children buried alive as school wall collapses



RSS  |  Contact us

| Quick links



Subscribe to

Ummid Assistant






About us




Government Schemes











Contact us





      Disclaimer | Terms of Use | Advertise with us | Link Exchange is part of the Awaz Multimedia & Publications providing World News, News Analysis and Feature Articles on Education, Health. Politics, Technology, Sports, Entertainment, Industry etc. The articles or the views displayed on this website are for public information and in no way describe the editorial views. The users are entitled to use this site subject to the terms and conditions mentioned.

© 2010 Awaz Multimedia & Publications. All rights reserved.