New Delhi: Food Minister K V Thomas on Wednesday said sugar output may rise by 300,000 tonne to 25.5 million tonne in the marketing year through September, bolstering the case for allowing more sugar exports when an empowered group of ministers (EGoM) meets on April 25.
The minister also said production in the next season “is expected to be at current year’s level”, citing inputs from the ministry of agriculture.
The food ministry had initially forecast sugar output at 24.67 million tonne and later revised it up to 25.2 million tonne for 2011-12.
India, the world’s second-largest sugar producer and exporter, expects sugar consumption to touch 21.5 million to 22 million tonne. The government has already permitted exports of three million tonne, in three equal tranches, so far this year.
He said the EGoM on food, headed by finance minister Pranab Mukherjee, will also decide modalities for allocating export the quota of one million tonnes approved by the EGoM on March 26. “We are not against allowing some more quantity of sugar exports as our position is good,” he said.
Thomas’ statement assumes importance as agriculture minister Sharad Pawar this month wrote to Prime Minister Manmohan Singh, complaining that the department of food’s “negative approach” to sugar exports has resulted in heavy losses in export earnings, which could have been used to clear cane arrears to farmers that have crossed R8,000 crore.
India’s sugar output rose 13% to 24.63 million tonne until April 15 on higher cane crushing in Maharashtra and Uttar Pradesh, according to the data by the Indian Sugar Mills Association. The industry body expects sugar production to touch 26 million tonne in 2011-12 and is pitching hard for fresh exports so that opening stocks of sugar for the next year get reduced to 5 million to 5.5 million tonne, compared with 6.8 million tonne in 2011-12. Good production as well as 6.8 million tonnes of opening stocks in 2011-12 improved domestic supplies and kept prices subdued, dragging down mills’ sales realisation, Isma said earlier this month.
US raw sugar futures crashed 27% in 2011, the first annual fall in four years, on higher output in Asia and Europe, although exports are still more remunerative for Indian mills as domestic wholesale prices have remained subdued more than seven months now due to adequate supplies.
Ex-factory prices of M30 grade sugar in Delhi were stable on Monday and were ruling in the range of R2,875 to R3,075 a quintal.