ISMA rules out sugar imports

India may not be a net importer of sugar during sugar year 2004-05 beginning October despite an expected drop in production this year.

Indian Sugar Mills Association (ISMA) rejected the report recently put out by the United States Department of Agriculture (USDA) forecasting that India may turn a net importer of sugar next year.

"We will have a carry over stock of about 80 lakh ton at the beginning of October which would be sufficient to take care of five and a half months of demand," SL Jain, director general, ISMA said.

ISMA was unhappy because "premature forecasting has helped speculators to unnecessarily rig up the prices," Jain said.

"The forecast is too premature. We still have many months to go and we do not know about the forthcoming monsoon," he added. Jain denied allegations industry was withholding sugar stocks.

The sugar industry has been facing allegations that some manufacturers were holding on to stocks on expectation of higher prices.

"Sugar industry has been selling at price of Rs 1100 in last three years even when cost of production is as high as Rs 1350-1400 per ton. The allegation that sugar industry is withholding stocks is baseless," Jain said.

The country's sugar output is likely to dip about 23 per cent to 15.5 million tonnes in the current year to September due to poor rains, lower crop area and pest attacks in a key growing region, industry officials admitted.

A recent USDA report said India was set to import sugar in 2004-05 after being a net exporter since 2000-01.

USDA said with domestic prices well above international prices, 2004-05 sugar imports were forecast at 1.0 million tonnes, mostly raw sugar to be further processed into refined sugar.