Where is the sugar industry headed?

DSIL - It is reported that sugar consumption is India has grown at 4.5% YOY and hence the consumption is expected to be 20.5 to 21 Million Tonnes. The cane and production estimate data are quite old and needs revision in view of incessant rains in Maharashtra, Andhra Pradesh and Gujarat which might have caused damages to sugarcane crop in these states. However, most optimistic estimate is 23 Million Tonnes.

MC - What was the total sugar exports prior to the ban and what realizations did the Indian sugar industry getting from those exports?

DSIL: All exports were under re-export obligation and the realisation was around INR 24000/- per tonnes.

MC - Do you have any win-win formula in place both for the government and sugar manufacturers?

DSIL: India being a democratic country and its economy is agriculture and rural dependant to a large extent, I personally feel that government should restrict itself to one corner holding approach and not hold the industry from all four corners. If the price for levy sugar is uniform for the entire country, even the cane prices should be uniform across the country. The central government fixes this in the form of SMP (statutory minimum price), which the states are then allowed to change through the SAP (state administered prices). The SAP deprives the sugar industry from level playing field and therefore, the states should not be allowed to review the SAP.

Also, all other controls and regulation like levy, release, etc may be done away with at the earliest. In the long run only efficient plants will operate with better recoveries and viable capacities. Government should also ban all unorganized players who neither contribute any penny to the exchequer nor care about the environment. They are also opportunist and pay low prices to sugarcane growers in times of abundant cane availability. Their recoveries are also substantially low.

Also, the government should further encourage ethanol and power cogeneration which will not only de-risk the sugar industry, but also contribute to the economic growth of India by contributing towards reducing high crude import bill, providing electricity to SMEs and farmers, increase government revenue and the farmers' income without a dent in the sugar industry's overall income. Moreover, all this will save the environment.  

By- Jhini Sinha Phira