The domestic sugar industry has raised objections against the possible government move to allow raw sugar imports on a ‘tonne to tonne’ basis. Indian Sugar Mills Association (Isma), the apex body of the domestic sugar industry, in a representation to the Union food and agriculture minister Sharad Pawar, has opposed any such move claiming that it “will lead to excessive imports which is not desirable for the sugar economy”.
Currently, raw sugar can be imported on a ‘grain to grain’ basis, which means an importer has to re-export the same raw sugar (after refining) which he imports. However, ‘tonne to tonne’ norm means an importer can re-export even the locally produced sugar against the imported quantity. Raw sugar import is allowed on advance licence basis, which requires importers to re-export within a period of two years.
There has been a demand from trading houses and certain millers to allow import on a ‘tonne to tonne’ basis. However, Isma and its affiliates like the South Indian Sugar Mills Association (Sisma) have claimed that “even if the production for the season falls below the estimates (20.5 million tonnes), there is sufficient time available to take necessary steps to ensure adequate availability in the domestic market”. The government can consider every possible step after getting more accurate estimates of production with progress in the season.
Sisma has claimed that the move to allow import on ‘tonne to tonne’ basis will open the floodgates to raw sugar imports, which apart from being totally unwarranted at this stage, would also impact domestic market prices and affect the ability of the mills to pay the farmers.
Domestic sugar output in the 2008-09 sugar season (October-September) is estimated at 20.5 million tonnes, down nearly 28 per cent over the previous season’s production of 26.22 million tonnes. The country has a carryover of 11 million tonnes, which takes the total availability to 31.5 million tonnes. After a consumption of 22 million tonnes and estimated export of 2 million tonnes, the country is likely to have a surplus of 7.5 million tonnes during the year.