A meeting was held by Joint Secretary (Sugar), Department of Food and PD with ISMA and NFCSF Ltd. Today, 5th Jan, 2018, to discuss the current situation of sugar in the country.
It was noted that sugar prices have fallen by over 10% since the beginning of the season. JS pointed out that even though the sugar production was higher than last year, the sugar stocks, as on 1st January 2018, is substantially lower to the sugar stocks last year and that sugar availability in the current season will be as tight as it was last season. It was, therefore, felt that there was no reason for the sugar prices to fall.
Government officials felt that there was unnecessary talk about 2018-19 production, when not even about 10 to 15% of the sugarcane for harvesting then has been planted. Even though with better rainfall in Western and Southern States, the sugarcane sowing may be better, it was accepted that it is totally premature to even guess a figure about next season’s production. In fact, the sugar production will get adversely affected if the rainfall from June to September 2018, is not good. Therefore, July 2018 will be a better time to have any preliminary idea about 2018-19 production, and not earlier.
Nevertheless, JS assured that if there is a surplus in 2018-19 SS, appropriate action would surely be taken with regard to policies to ensure that that the surplus, if any, is disposed off in time and in the best manner as deemed appropriate. In the last three years, the Government has taken various steps, including giving concessional loans, incentives on exports, incentivizing ethanol production to reduce surplus sugar etc. and, therefore, everyone felt that as and when required, the Government will surely take immediate appropriate decisions on time.
Since the sugar production and demand is very balanced and the closing balance will still remain tight at just around 40 lac tons at the end of the season, there is absolutely no scope of any exports in this season. Therefore, reduction in the export duty may does make much sense now.
About the subsidies being given by Pakistan Government, it was noted currently it is not viable to import from Pakistan. One could get a sense that if Pakistan imports do become viable, or if any contracts start taking place for importing sugar into India from Pakistan, the Government is willing to increase the import duty to check any such imports. It was highlighted that as per Indian Customs Tariff Act, the sugar import duty can raised to 100% within a couple of days. The Government would consider increasing import duty to check all unnecessary imports and give full comfort to the market that no imports will happen.
Regarding need of exporting the surplus, if any, in 2018-19 sugar season, Bangladesh and Sri Lanka Governments would be approached for extending preferential duties under SAFTA and treaty amongst SAARC nations. It was agreed that there is enough time for such Government to Government discussions and negotiations, since the surplus, if any, would come up only after November 2018, and there is no concern about the surplus till then. The Hon’ble Union Minister of Commerce was approached early in the day, who has kindly assured that he will use his good offices for all support and assistance that is required in this direction.
It was noted that sugar prices have fallen by over 10% since the beginning of the season. JS pointed out that even though the sugar production was higher than last year, the sugar stocks, as on 1st January 2018, is substantially lower to the sugar stocks last year and that sugar availability in the current season will be as tight as it was last season. It was, therefore, felt that there was no reason for the sugar prices to fall.
Government officials felt that there was unnecessary talk about 2018-19 production, when not even about 10 to 15% of the sugarcane for harvesting then has been planted. Even though with better rainfall in Western and Southern States, the sugarcane sowing may be better, it was accepted that it is totally premature to even guess a figure about next season’s production. In fact, the sugar production will get adversely affected if the rainfall from June to September 2018, is not good. Therefore, July 2018 will be a better time to have any preliminary idea about 2018-19 production, and not earlier.
Nevertheless, JS assured that if there is a surplus in 2018-19 SS, appropriate action would surely be taken with regard to policies to ensure that that the surplus, if any, is disposed off in time and in the best manner as deemed appropriate. In the last three years, the Government has taken various steps, including giving concessional loans, incentives on exports, incentivizing ethanol production to reduce surplus sugar etc. and, therefore, everyone felt that as and when required, the Government will surely take immediate appropriate decisions on time.
Since the sugar production and demand is very balanced and the closing balance will still remain tight at just around 40 lac tons at the end of the season, there is absolutely no scope of any exports in this season. Therefore, reduction in the export duty may does make much sense now.
About the subsidies being given by Pakistan Government, it was noted currently it is not viable to import from Pakistan. One could get a sense that if Pakistan imports do become viable, or if any contracts start taking place for importing sugar into India from Pakistan, the Government is willing to increase the import duty to check any such imports. It was highlighted that as per Indian Customs Tariff Act, the sugar import duty can raised to 100% within a couple of days. The Government would consider increasing import duty to check all unnecessary imports and give full comfort to the market that no imports will happen.
Regarding need of exporting the surplus, if any, in 2018-19 sugar season, Bangladesh and Sri Lanka Governments would be approached for extending preferential duties under SAFTA and treaty amongst SAARC nations. It was agreed that there is enough time for such Government to Government discussions and negotiations, since the surplus, if any, would come up only after November 2018, and there is no concern about the surplus till then. The Hon’ble Union Minister of Commerce was approached early in the day, who has kindly assured that he will use his good offices for all support and assistance that is required in this direction.
