After three years of high sugar output, India is looking forward to break the commodity's cycle with good output in the next two years.
“The 2012-13 output will be good. If we continue with that trend in 2013-14, we will be able to break the sugar cycle,” said the Union Minister of State for Food and Consumer Affairs, Prof K.V. Thomas. He was addressing a press conference ahead of the 41st session of the three-day International Sugar Council beginning Tuesday.
Typically, sugar follows a five-year cycle, wherein the production is high in the first three years. In the remaining two years, production comes down as farmers switch over to other crops as cane arrears tend to mount over delayed payment by mills.
“We are trying to break the sugar cycle with the help of the industry and farmers,” he said.
According to latest estimates of the Agriculture Ministry, sugar output is expected to touch 26 million tonnes, a record high. The industry has been projecting an output of 26 million tonnes since the beginning of the 2011-12 sugar season that began in October.
“The production estimate of 26 million tonnes looks realistic,” said Mr Peter Baron, Executive Director of the International Sugar Organisation (ISO). He sought to term India as a “wild card” in the global sugar market, because of the cyclical trend.
“Over the past few years, we are looking at most stabilising trend in the Indian market. We understand the responsibility of the Indian Government to supply sugar to domestic consumers. Therefore, it is not an easy fix and the progress is slow,” Mr Baron said.
On the decontrol of the Indian sugar industry, Mr Baron said: “We don't interfere in the domestic policy. The responsibility of the Government is very high and I appreciate their caution in deregulation. It is not very easy because there's too much at stake”.
Mr Baron said the global production need to be increase by 28 million tonnes to 200 million tonnes by 2020 to meet the rising global demand. Such demand growth will be driven by China and Africa where per capita consumption is much lower than the world average of 24 kg a year.
China's consumption is about 10-11 kg, while the per capita in Africa is below that. In India, sugar consumption is around 19 kg a year, Mr Baron said.