In an exclusive chat with ET Now, Vivek Saraogi, MD, Balrampur Chini Mills, said he expects government to fix correct cane price going ahead. ET Now: Before we talk about the sugar sector, let us talk about the new leadership in your state. How is it that you are rating the first 100 days of Yogi Adityanath?
Vivek Saraogi: I do not think 100 days are past yet but all said and done, the first feeding we get is one of being very positive. The leadership seems very correct in its thinking and in execution, that is feeling till now. ET Now: So do you think there is going to be a change in the so called sugar politics of Uttar Pradesh or it will remain status quo?
ET Now: Let us address the other core issue, which is farm loan waiver. Some would argue that a farm loan waiver on paper looks like it is a political move because this will impact the discipline of the borrower and even disciplined borrowers now would like to go to the default route. Net-net it could have a real impact on the agrarian economy and the finance economy of that region. So good comes with bad and this is the bad part.
ET Now: Let us talk now about now sugar as the upward bias in the sector continues. How are you assessing the demand-supply gap in the sector and what according to you would be the role of imports to plug this particular gap?
Vivek Saraogi: This year we produced about 20.3 million. We had an opening stock of 7.7 million, making for a total availability of 28 million. I see consumption at let us say 24 million, leaving a closing stock of 4 million and this recent announcement of 0.5 million or 5 lakh tonnes by Government of India, again if you see the way they have announced the import they have handled regional imbalance beautifully. They have gone on to say that, let us Tamil Nadu is the lowest producer and Tamil Nadu has the least amount of sugar stock compared to India as a percentage. So Chennai Tuticorin have been given the highest weightage. So it is a 5 lakh import divided over all ports in India, basically where the government felt there is need, shortage. So I must compliment this move both on the quantum and the style. Getting back to the data point, 4 million closing stock plus 0.5 import would give you availability of 4.5 million as on 1st October that is a very decent stock position. It is neither surplus nor shortage and hence I see the price which is currently prevailing let us say about for UP mills about 36.5 to 37 to remain positive to firm as we ahead.
ET Now: I will take the clock forward and something which you will have to address because we always get into this one quarter and next quarter, six months, one year. Companies are not built for a quarter, companies are built to last so let us talk about 2020 by 2020 for Balrampur Chini even though it is a sugar company how much of your projected revenues could come from non-sugar business whether it is ethanol or power or anything else?