Sugar prices are expected to remain under pressure due to an estimated supply gap of 3.5-4 million tonnes in the next marketing year starting October, former Agriculture Minister Sharad Pawar said on July 28.
The Nationalist Congress Party (NCP) supremo also asked the industry to be prepared for any government action, including possibility of import of raw sugar to boost domestic supply and check prices.
“This year, sugar production situation is good. But I don’t see similar situation in the next year. In 2016-17, there will be 3.5-4 million tonnes gap in demand and supply,” Pawar said at the 74th annual convention of the Sugar Technologists’ Association of India (STAI).
Sugar rates, which at present are ruling in the range of Rs 34-38/kg, may come under pressure due to a likely gap in supply and demand, he said.
“Next year, with a gap of 3.4 to 4 million tonnes of sugar, there will definitely be an impact on prices and the government will take some steps and the industry should be ready for that,” he noted.
The government has projected sugar output to decline to 23-23.5 million tonnes in 2016-17 marketing year (October-September), as against 25.1 million tonnes in the current year. Meanwhile, industry body Indian Sugar Mills Association (ISMA) has pegged sugar output at 23.26 million tonnes for next year.
Pawar said the country’s sugar demand is around 25.6 million tonnes and is expected to grow at 3-4 per cent per annum. By 2020, sugar demand is pegged at 30 million tonnes.
Apprehensive about the government’s policies to check price rise in sugar, Pawar asked the industry to be prepared for the possibility of sugar imports.
“A suggestion has been made to import raw sugar to bridge the gap. There are other alternatives and I hope the government will take appropriate action,” he said.
To curb price rise in sugar, the government has recently imposed 20 per cent export duty on sugar and withdrawn cane production subsidy to the mills.
Expressing concern over low cane productivity and cyclic nature of the crop, Pawar urged the government to take “proactive steps” to promote modern technologies, including genetic engineering to address biotic and abiotic stress.
He also said that a Pune-based institute has developed a transgenic sugarcane plant, and the government should allow field trial of it in restricted areas under the supervision of agriculture universities.
The NCP leader said that Indonesia has developed saline and drought-resistant cane variety and the government should “give a serious thought to this” if the variety has given good results.
Pawar asked the sugar mills to take ethanol blending programme seriously and ensure sufficient supply to the oil marketing companies (OMCs).
“I am informed that distilleries are not able to meet the requirement of OMCs. I think, time has come you take this seriously. There may be some hurdles and this should be sorted out amicably,” he advised.
Not only cane crop productivity should be raised, the mills should use modern technologies to reduce cost and make more viable business, he added.
Former President Pratibha Devisingh Patil asked the industry to focus on use of drip irrigation in cane cultivation and also favoured use of GM cane varieties to boost crop yields.
She urged the sugar technologists to work on developing small size machines for use in cane farming while suggesting sugar mills to focus on energy conversion and conservation.
“There is immense scope to improve production both in field and factory, for which technology is the key,” she added.