Indian sugar mills association

Pawar rubbishes food min sugar

Date:	23 Oct 2011

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News ID:	613

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New Delhi, Oct 22: The ministries of agriculture and food seem to be on collusion course again. A day after the food ministry pegged the country`s sugar output in the year starting October sharply lower than the industry`s projection of 26 million tonne, Agriculture Minister Sharad Pawar on Thursday said the official estimate is flawed, and almost agreed with the industry forecast.

Food minister K V Thomas said on Wednesday that the country`s sugar output will likely rise by only 300,000 tonne in 2011-12 from a year before to 24.60 million tonne, based on the assessment by cane commissioners of producing states.

However, Pawar said, “My impression is that there is some mistake in (food ministry`s) calculation. I think (sugar) production will be between 25.5 million and 26 million tonne. I will collect the proper figure and then give it to the food ministry.” “Monsoon is good, reservoir position is good. So there will be higher withdrawal (quantity of sugar produced from cane) than 2010-11,” said Pawar, who was the food minister before Thomas took charge earlier this year.

The food ministry firms up sugar output estimate each year, while the farm ministry forecasts sugarcane production. According to the agriculture ministry`s estimate released last week, the country`s sugarcane production is expected to rise to 342.2 million tonne from 339.2 million tonne a year before.

An official source said the food ministry`s estimate was reached considering the cane output projection given by the farm ministry. “The first advance estimate by the agriculture ministry talks about a rise of 3 million tonne in cane output in 2011-12. Considering that the average recovery rate from cane is a good 10%, the 3 million tonne of extra cane will result in 3,00,000 tonne of more sugar output. So if the country produced 24.3 million tonne in 2010-11, it`s fair to say the output in 2011-12 will be 24.6 million tonne,” he said.

The differences between the two ministries may spell trouble for an early approval for sugar exports in 2011-12, more so because of an expected growth in domestic demand during the festival season starting late-September. Importantly, Pawar had said on Monday that the government needed to announce its sugar export policy for 2011-12 by the second week of October for the benefit of both millers as well as farmers. The country expects to consume close to 22 million tonne in 2011-12, leaving room for some exports, according to government officials.

India allowed sugar exports of 1.5 million tonne under the open general licences after a gap of two years when it faced a shortage. Industry executives had said sugar mills lost out on a chance to maximise export returns by cashing in on soaring global prices in February and March due to the late decision by the government.

Although Food minister Thomas has always maintained that there is no friction, differences between the two ministries had cropped up in the past, too, especially on decisions relating to exports of key commodities. In April, while the food ministry was adopting a cautious approach on wheat and rice exports in view of the government`s plan to implement the food security bill, which will widen the Centre`s subsidised supplies of grains, the agriculture ministry favoured allowing exports to create space in overflowing granaries. EGoM allowed shipments of rice and wheat but decided to review the policy after the shipments of 2 million tonne. Similarly, the two ministries were divided on allowing exports of sugar and, more recently, onion. While the agriculture ministry has been more liberal in favouring exports, the food ministries has remained overtly cautious about impact on domestic prices.

“He has to look at farmers` interests and I have to look at interests of consumers. But both of us are working together. Exports will happen when farmers will gain,” Thomas had said earlier.

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