The sugar industry has asked the government to allow export of 15 lakh tonnes of the commodity to manage surplus production. The industry is worried about the shortening window to produce raw sugar as the sugarcane crushing season is at its fag end. According to industry body Indian Sugar Mills Association (Isma), 230.5 lakh tonnes of sugar was produced between Oct 1, 2017, and Feb 1, 2018, which is 67.88 lakh tonnes more than the production in the same period last year.
Around 40 of the 522 mills across India already stopped crushing operations and a majority of the mills from Maharashtra are expected to shut operations by April. An expected bumper crop next year may warrant early beginning of crushing operations and the industry is keen to begin exports before the onset of the monsoon season. Also, movement of sugar as well as port operations become sluggish during the monsoon season.
“Considering that there has been reportedly a larger sugar production in the current year and is also expected in the 2018-19 season, there is a need to export at least 15 lakh tonnes over the next 6-7 months. This will result in extra cash flows to the sugar mills, which, in turn, will ensure timely payments to farmers and reduce arrears,” Isma said.
Industry stakeholders say allowing exports while the crushing season is on could be more helpful. “Considering that there is not much demand for Indian white sugar, producing raw for exports can be more viable,” said sugar broker Abhijit Ghorpade.
The government’s recent decisions to raise import duty to 100% and imposing a quota on sugar sales by mills have helped stabilise prices. However, as there has been an alarming rise in the cane price arrears, the industry has demanded further policy measures to help the sector.