INDIA: Early crush seen supplying deficit regions

Published: 09/01/2017, 5:13:26 PM

With sugar mills planning to commence cane crushing early this year, the pre-season supply is set to meet the deficit in some parts of the country, C R Choudhary, Minister for State, Food & Public Distribution, said on Friday, according to India's Business Standard newspaper.

For the first time, sugar mills in Uttar Pradesh have decided to commence crushing of cane in October this year. Mills in India's largest sugar producing state normally begin crushing in November with the maturing of standing crop. In Maharashtra, Tamil Nadu and Karnataka, however, mills start crushing by mid-October. A recent survey conducted by the apex industry body Indian Sugar Mills Association (ISMA) showed all sugar mills accumulative to see 800,000 tonnes of production in October. The October output is set to a new monthly record this year.

Speaking on the sidelines of the "AISTA Sugar Conclave 2017", a three-day event that begun on Friday, Choudhary said that the government's focus is to make India an export-oriented sugar industry rather than import - oriented. For this, the government needs to create a balance amongst farmers, mills and consumers, which poses a big challenge.

The government's main objective is to ensure full and timely payment for sugarcane farmers. "Sugar mills were accumulatively holding a total cane arrears of INR218.37 billionin 2014 of which 99% have been paid to farmers so far. A little amount is still left unpaid for the crushing season 2016 and 2017 on which the government is working on to get it cleared," said Choudhary.

He further said that farmers need to be paid adequately to make sugarcane remunerative and further ensure that they do not switch to other crops like oilseeds and pulses. Farmers are smart to switch to the crop which fetched higher prices during the previous season. Thus, the government wants to make sugar industry an export-oriented with stable price which includes the cost of production, transportation and the sustainable profits for the entire value chain.

Choudhary said that the government faces three major challenges i.e. to ensure farmers' timely and realistic (Fair and Remunerative Price or FRP), mills to get adequate profit to run their business and consumers to buy sugar at an affordable price. "The government is monitoring both wholesale and retail price of sugar on daily basis. We found that the wholesale price stands at INR35 (US$0.55) a kg and the subsequent retail price at INR44 a kg. Why such a vast difference? We found that retailers are building stocks and not releasing the quantity adequately," the minister said.

To address the problem, therefore, the government levied stock limit for both September and October on mills. In November, however, there will be a supply of the new season production.

Speaking on the occasion, Praful Vithalani, Chairman of AISTA, said that the Association was set up over a year ago with the purpose to make a voice of all value chain in sugar industry including farmers, mills, traders and other participants.