The governments decision to keep the sugar import window open at a time when output forecasts are good and stocks are in plentiful supply will hit the domestic trade hard, industry officials said.
About 3,00,000 tonne of imported sugar has already landed in the country. It is enough to disturb the market and adversely hit sugar production, says S L Jain, secretary general, Indian Sugar Mills Association (ISMA).
He said imports would grow because of the rupee's recovery against the dollar.
Officials of the Agricultural and Processed Food Products Export Development Authority (APEDA) said that as of January 9, traders had registered to import about 3,59,000 tonne of sugar since the start of the 1997-98 season. But they said APEDA did not have information on how much sugar had actually landed in the country.
Domestic sugar output, which touched a record 16.4 million tonne in 1995-96 (October-September), fell to about 12.9 million tonne in 1996-97. The industry and the government expects the 1997-98 output to be about 12-12.5 million tonne.
Food ministry officials say they plan to continue a policy of free sugar imports to deal with unexpected developments. They add that while there is no likelihood of large-scale imports, a finely balanced supply and demand position would need a safety net of free imports.
But industry officials complain that domestic sugar prices have fallen by Rs 500-700 a tonne since imports started. The domestic prices are going down but nothing is being done by the government, says M S Marathe, managing director, National Federation of Co-operative Sugar Factories.
Jain was also critical of the government's indifference. We have a government which keeps its eyes shut while claiming that they are keeping a watch, he said.
Government officials say that compared with India's annual sugar consumption of 11-12 million tonne, the imports are negligible. But Jain rejects the comparison. The imports are almost 50 per cent of the monthly consumption of about 7,00,000 tonne, he said. "Whenever the sugar arrives, it unsettles the market. Jain said that by January 1 of the current season, sugar output had touched 3.36 million tonne. (Reuters)
