Subjecting the sugar price to market forces while continuing to regulate cane prices has resulted in its component of the overall price skyrocketing to 90 percent, Indian Sugar Mills Association (ISMA) president A. Vellayan has said.
"..we have reached a stage last year, when the cane price as a percentage of the sugar price in India, was over 90 percent, globally it was between 60 to 65 percent in Brazil, Australia and Thailand," said Vellayan addressing the 81st ISMA Annual General Meeting (AGM) on Wednesday.
Vellayan said though sugar industry is not the favourite of stock brokers, it is unforgettably important to the Indian industry as it employs 15 million farmers and supporting a rural ecosystem without middlemen.
"In fact, the profit per acre of sugarcane is higher than that of crops like paddy, wheat, cotton, soyabean, gingelly, black gram, banana, tapioca, etca," said Vellayan.
Explain the lack of demand for sugar for five years in a row, Vellayan said, "The narrow margins between sugarcane and sugar, is entirely on account of excess supply of sugarcane and consequent sugar production, leading to outstripping of sugar demand for five years in a row."
The ISMA president exhorted the need to immediately restore sugar industry to profitability as it provides job security to 15 to 20 lakh people, has potential to produce 25 billion units of green energy, is the second largest sugar producer with the industry valued at Rs.80,000 crore and contributes Rs.75,000 crore as taxes.