India takes measures to tide over sugar shortfall

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India's sugar mills have backed out of import deals to the tune of 100,000 tonnes, and traders have diverted cargoes as prices tumble.

Analysts and traders believe if lower prices do not improve, mills can back out of import deals of another 500,000 tonnes.

A top industry official on Wednesday told Reuters that the supply situation was now "comfortable" and the country did not need further imports.

Here are the steps taken by the government in the past year to improve supplies:

2010

March 9 - The Indian Sugar Mills Association, the top body of private producers, raised 2009/10 output forecast by 5% to 16.8 million tonnes.

Februry 5 - The government bars large sugar consumers from stocking sugar of more than 10 days of consumption. The limit would be applicable for six months from February 20.

January 13 - India's cabinet panel allows duty-free imports of refined sugar up to December 31, 2010.

2009

November 19 - The ruling Congress party says Prime Minister Manmohan Singh will consider changes in fixing cane prices after farmer leaders disrupt parliament demanding higher returns on cane.

November 13 - India issues formal orders extending tax-free imports of raws until December 31, 2010 and whites until March 31, 2010.

October 29 - The government fixes a "fair and remunerative" price of 129.84 rupees (USD 2.80) per 100 kg of 2009/10 cane crop.

August 25 - The government asks large consumers to keep sugar stocks at levels that meed 15 days of demand, down from from 30.

July 31 - India extends duty-free imports of raw and refined sugar.

June 25 - India raises the minimum price that mills must pay to farmers for sugarcane by a third to a record high of 107.76 rupees per 100 kg to encourage farmers to plant more.

June 19 - The government extends a sugar stocks limit until Jan. 8, 2010, to ensure adequate supplies in the local market.

May 26 - India's commodities market regulator bars the launch of new sugar futures contract until the end of 2009 to check speculation and price rises.

April 10 - The country allows duty-free imports of white sugar and asks three state-run trading firms and a farmer cooperative to import up to one million tonnes of tax-free white sugar before Aug. 1. It exempts mills importing raws until July 31 from an obligation to export whites.

February 23 - India imposes stock limits on sugar until July 9 to tame prices.

February 17 - The government allows mills to import duty-free raw sugar on condition that an equal quantity of white sugar would be exported within three years.