Exporting Surplus Sugar From India has become a Difficult Proposition
The Government has willingly taken over an additional subsidy burden of around Rs. 3000 crore per annum to ensure the sugar supply at concessional rates for Public Distribution System. Now the industry, especially the mills, must work to pass on this benefit to the people in general and the sugarcane farmers in particular. This was stated by Prof K.V. Thomas, Minister of Consumer Affairs, Food & Public Distribution.Expressing concern over present problem of profitability and cash flow and payment to the farmers he said that sugar mills need to diversify their product mix to come out of it. He even raised concern about the slump witnessed in the domestic sugar prices in the last few months. The current situation has not only created cash flow and profitability issues for the sugar mills but has also led to pendency of Cane payments to the sugarcane farmers on account of supplies made by them during 2012-13 sugar season. The major reason for the scenario is the simultaneous glut in production seen globally which has made the exports of the surplus sugar stocks from India a difficult proposition.
He noted further that 2013 has been a watershed year for the Indian sugar industry as the Government has been able to remove the major regulatory controls on the sugar sector and laid the roadmap for its further liberalization. The industry is now free to sell its main product i.e. sugar without governmental directions and the levy obligation, which has been a major aspect of discontent in the industry and this has, now, been removed.
India has entered into the fourth year of production of sugar over and above the domestic consumption requirements. While during the initial years of this phase of high production, the global prices of sugar ruled above the domestic prices and costs, and the equilibrium was provided by exports. But this is not so, from the sugar season 2012-13 onwards.
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