India may export sugar next year

India may export sugar next year

New Delhi: India’s sugar production next year will exceed domestic demand, yielding enough of a surplus for exports, said Union agriculture minister Sharad Pawar in Parliament on Monday. Pawar also hinted at the reimposition of duties on sugar imports.

The government expects sugar production of 18 million tonnes (mt) in the current season (October-September), Pawar said. Production in the world’s largest consumer of sugar fell last year to 15 mt from 23 mt in the year before, leading to a surge in price amid shortages, forcing the government to allow imports of the commodity. “I think we will have surplus sugar and we will have to think of exports," Pawar said while replying to a discussion on his ministry.

The minister said earlier in Parliament that the import duty on sugar had been scrapped because of a demand-supply mismatch. “But that was the situation last year. The position is altogether different (now)," Pawar said. “There is more production and prices are going down. We have to protect sugar cane farmers." A decision regarding import duty would be taken at an “appropriate time," he said.

India allowed duty-free imports after a drought in 2009 ravaged crops and cut output, Bloomberg reports. Prices in Mumbai have fallen 31% from a record Rs4,050 per 100kg on 8 January 2010 after the government extended duty-free imports of white sugar until 31 December 2009 and forecast output may be more than previously estimated.

Sugar output in the country may be 23 mt in the year ending 30 September 2011, compared with 18.5 mt forecast this year, Vinay Kumar, managing director of National Federation of Cooperative Sugar Factories Ltd, said on 20 April.

The government on Monday also rejected an Opposition demand for universalization of the public distribution system, saying that any such move would substantially increase the food subsidy bill for the government, which is Rs65,000-70,000 crore a year currently. “If we universalize the public distribution system, the government will have to procure 70 mt, which has never been done. It never went beyond 54 mt," said Pawar. “Where will the subsidy come from?" Pawar asked.

The Opposition, led by the Left parties, has been demanding that both below poverty line (BPL) and above poverty line sections be treated at par and given an equal quantity of foodgrains at equal subsidy. The Left parties staged a walkout in response to the minister’s “unsatisfactory" reply.

Pledging to bring the Right to Food Security Bill (which guarantees BPL families wheat and rice at Rs3 per kg) to Parliament for consideration soon, Pawar said the Centre would take the states into confidence before putting it in the public domain.

Bloomberg contributed to this story.