Continued sugar imports, particularly from Brazil, despite surplus domestic sugar produce in India is hurting the domestic sugar industry, an industry veteran said here Monday.
"During last two years, 40 lakh metric tonnes of sugar worth $2 billion has been imported... India could have exported sugar worth the same price," said past president of Indian Sugar Mills Association O. P. Dhanuka who is also the chairman and managing director of Riga Sugar Co Ltd.
According to Dhanuka, despite a surplus domestic produce and lack of space to stock the produce, India continues to import sugar primarily for re-export which is draining the life off more than 600 sugar producers in India.
"Expected production (of sugar) for the season will be again surplus of around 255 lakh metric tonne," he added.
During 2013-14, Indian imports stood at 8.21 lakh metric tonnes despite a market surplus.
Global sugar prices are already going south steadily particularly on account of the heavy surplus and a balanced increase in consumption.
According to data from department of agriculture and cooperation, global sugar production will stand at 1755.89 lakh metric tonnes by the end of the current fiscal while the total market in India has grown at a CAGR of 6.04 percent over the past 10 years.
Despite the fact that India is the world's second largest sugar producer following Brazil, the country ranks sixth when it comes to export and had a market share of 5.2 percent during 2013-14.
"Re-export of sugar against advance license is only 18 lakh metric tonnes against import of 40 lakh metric tonne, leaving the stock of 22 lakh metric tonne flooded in the domestic market," Dhanuka said.
During the surplus period of the last four years, partial decontrol over the price and stock was done from April 2013 by removing levy and release order. However, in the last season, 35 lakh metric tonnes of imported sugar, estimated at Rs.8,000 crore, have landed in Indian ports which has added further woes to the existing domestic surplus.
