India to import sugar; Govt provides cheap loans to farmers

"As per the intital estimate of sugarcane availability during 2009-10 sugar season, it is expected that the country would require to supplement its domestic availability of sugar with imports," Food and Agriculture Minister Sharad Pawar said here today at a conference.
Nevertheless, sugar prices may touch Rs 40 a kg, more than double from a year earlier, when fresh imported consignments land here in the next season, according to the National Federation of Co-operative Sugar Factories President, Jayantilal B Patel.

The overseas rate of sugar will spiral upward due to a shortage in major producing countries like India, he observed.
India, the largest sugar consumer in the world, had to import the sweetener in 2008-09 after production fell to about 15 million tonnes against its annual domestic requirement of 22.5-23 million tonnes.
Worse still, sugar stocks from this season would be significantly lower, compared with those of ten million tonnes from the last season, Pawar said.
"We will be starting the next sugar season from October 1, 2009 with a much smaller opening balance in comparision with the previous year," he said.

The stocks have already been depleted to a considerable extent after the output fell and the government had to rely on the reserves, apart from allowing import at zero duty for sale in the local market, to contain the rise in prices, which have almost doubled to Rs 35 a kg in one year.
Not just yield, the coverage of sugarcane, a summer-sown crop, is already down by over one lakh hectares so far.
However, Pawar reiterated the government's intention to ensure adequate supplies of sugar at "reasonable" rates and also its committment to offer good price to sugarcane farmers.
He said the sugar industry is "cyclical" in nature. "Two to three good sugar seasons with good sugarcane and sugar production are followed by one to two years of less production of sugarcane and sugar."
Ironically, India had exported about 6 million tonnes of sugar between 2007 and 2008 with government assistance after reaping bumper harvest in successive years.

Admitting a "difficult situation" due to poor monsoon, which may affect the productivity of sugarcane, the minister said: "We are trying to give concessional loans to farmers at 4 per cent interest to improve productivity as well as the sucrose content in sugarcane."

Recently, the government allowed mills to take loans from the Sugar Development Fund at four per cent interest so that they can pass on the same benefit to sugarcane farmers in helping them purchase quality seeds and farm implements.