New Delhi: With production estimated to be around 230-240 lakh tonnes in the 2006-07 season, the sugar industry may soon be facing a glut of the sweetener in the market, despite the government saying it expects sugar exports to be around 15 lakh tonnes.
“The Central government has not fixed any target for export of sugar during 2006-07 season. However, it is estimated that about 15 lakh tonnes would get exported in this season,” agriculture and food minister Sharad Pawar on 9 March told the Rajya Sabha.
With the opening stock at the start of season in October 2006 at 40 lakh tonnes, the surplus sugar is expected to be at over 70 lakh tonnes as the country’s annual demand is pegged at only 190 lakh tonnes.
In addition to export, the government is also considering a proposal to start a buffer stock of sugar on the lines of foodgrains procured by it.
Even after taking into account a buffer stock of 48 lakh tonnes, the quantum of surplus comes to 33 lakh tonnes, Pawar had last month told the consultative committee meet attached to the food ministry.
But the sugar industry doubts the government estimate on export unless it is subsidized.
The international prices of sugar are lower than the Indian prices (at port), sugar expert Rakesh Sharma of KS Commodities said.
“Unless the government accepts the demand of the industry to bear the cost of inland and ocean freight, sugar export will not be viable,” Sharma said.
The decision to exempt sugar meant for export from levy obligation also could not make export attractive.
The country has so far exported about one lakh tonnes of sugar and the government has issued an export release order for six lakh tonnes since the ban was removed in January this year.
Meanwhile, the sugar production estimate made by the Maharashtra cane commisssioner for the state has been revised to 81 lakh tonnes from the earlier estimate of 70 lakh tonnes.
“As regards production of sugar in Maharashtra during 2007-08 season, it is too early to make such estimate at this stage,” Pawar said while replying to a query from Rajya Sabha member Supriya Sule.