New Delhi: India will import 3-4 million tonnes of raw sugar in 2009-10, even higher than shipments in the current year that have sent sugar prices soaring, the head of Sucden India said on Wednesday.
The world’s largest sugar consumer and also its second-biggest producer is expected to buy 2.5 million tonnes in the year to September, Yatin Wadhwana, managing director of Sucden India Pvt Ltd, said.
These purchases, after exports of 5 million tonnes the previous year, have been a key factor in the up to 30% rise this year in New York raw sugar futures.
The front-month contract hit a near 3-year high of 16.05 cents per lb in late May as India allowed duty-free imports of raw sugar, before a firm US dollar spurred heavy selling.
“My impression that India will have to import 3-4 million tonnes of sugar next season is based on the fact that I am yet to see concrete, credible evidence of a substantial increase in cane planting,” Wadhwana said in an interview.
Mills have so far contracted to import 2 million tonnes of raws and 1.5-1.6 million tonnes have arrived, while deals have been sealed for imports of 100,000 tonnes of whites, Wadhwana, who heads the Indian arm of global trading house Sucden, said.
Hit by forecasts of a sharp 45% drop in 2008-09 output to 14.7 million tonnes, the government allowed mills to import duty-free raws in February, and in April, asked state-run firms to buy up to one million tonnes of whites at zero import tax.
Many mills could not import raw sugar as by the time the government allowed tax-free overseas purchases, they had run out of bagasse, a by-product that mills use to fire boilers.
“Imports will definitely go up in the next season as mills will begin crushing on time since they will have imported raws to process. Mills will have to depend on imports as cane availability will not improve substantially,” Wadhwana said.
He said farmers were not paid well in the last season.
“I am not the one who believes that there will be a huge increase in cane acreage as payment to farmers was not commensurate. Unlike cane growers, wheat or rice farmers were well taken care of. There may be a marginal hike,” he said.
In the current season, Wadhwana said, sugarcane farmers in major sugar producing states were paid an average Rs140 per 100 kg and should have been paid more.
An industry official last month said farmers in Maharashtra, India’s top sugar producer, have planted cane on 800,000 hectares against 770,000 hectares a year ago.
Another official said the area under cane cultivation in Uttar Pradesh would go up by 24% to 2.1 million hectares.
Wadhwana said the reports of a rise in acreage were only an initial sign and a lot would depend on plantings during the monsoon months of June and July.
“We know that the progress of monsoon rains is not very encouraging,” he said.