Some people are doubting the adequacy of sugar availability for our domestic needs over the next 12-18 months. A handful have even crossed sensible reasoning and are suggesting sugar imports. Their argument is not only distorted, but smacks of vested interests trying to create business for themselves, when actually there is none.
With opening balance of 73 lakh tonnes for 2016-17 sugar season (SS), and production of 233 lakh tonnes, there is more than enough sugar for the estimated domestic consumption of 260 lakh tonnes, at least for the next12-14 months. Then, why the doubt? The following should clarify .
The above leaves carry forward stocks for 2017-18 SS of 45 lakh tonnes on October 1, 2017. The question is whether this is good, and enough as opening stocks. Before we answer that, let's see why we need any opening stock at all and what should that number be.
Though the Sugar Year starts from October 1, sugar production from the new season comes into full swing from November end. Therefore, carry-over stocks are required to meet the domestic consumption needs for this intervening two months. Previously , the government had a norm of having OB of three months consumption. Why three months and not two? Under the `regulated release mechanism' of sugar sales, there was a time lag of at least 30-45 days between production and sale. Submission of production reports, compilation of data and issue of release orders accounted for lead time of 30-45 days.
On an average, India produces 1820 lakh tonnes in October-November, which under the previous regime of regulated release mecha nism, could come into the market only in December or January . After abolition of the release mechanism in 2013, sugar produced today can be sold tomorrow itself. There is no time lag. So, the 18-20 lakh tonnes produced in October-November is available for consumption in the same months. Further, country's sugar production comes in full swing from November end and from beginning of December. Therefore, when the new season's sugar is in the market from November, it makes pure economic sense to reduce the carry burden, previously of three months consumption requirement, to two months. The 45 lakh tonnes on October 1, 2017, is equivalent to two months consumption requirement, and if the 18-20 lakh tonnes produced in OctoberNovember 2017 is added, we have more than `enough'. Not only is there surplus sugar for the next 12-14 months, but enough to start the next season of 2017-18 with adequate OB for the intervening period before new season's sugar hits the market by November-end 2017. Additionally, with a surplus sugar production year expected in 2017-18 SS, there is absolutely no need to import sugar, which could burden the country , mills and farmers unnecessarily for several years.