New Delhi, July 14: Surging imports from Pakistan have pushed down Indian sugar prices, and the market is expected to remain depressed during the monsoon season because of dull demand, industry officials said on Tuesday."India has become a very lucrative market for Pakistan to sell their sugar," Shanti Lal Jain, director-general of Indian Sugar Mills Association (ISMA), told Reuters."The Pakistani devaluation of the rupee will further accelerate sugar imports to India. The way imported sugar is arriving, the sluggishness in our domestic market will continue," Jain added.
Trade officials said sugar in the domestic markets had fallen to about 13,750 Rupees ($323) per tonne from about 14,500 Rupees a fortnight ago."I don't see the market in a bullish mood until September -- at least until the festival season starts," said Yatin Wadhwana, director of BSI Ltd, a New Delhi-based sugar trading firm.
"Until then, prices will move in a narrow range. There is enough availability of imported sugar -- especiallyPakistani sugar," Wadhwana added.
The months of September to November are Hindu festival months, during which the demand for key commodities such as sugar and edible oils surges.Trade officials said India has already imported 680,000 tonnes of sugar since September 1997 out of which some 200,000 tonnes were Pakistani sugar.
Trade officials said the start of the rainy season had also pushed down domestic sugar demand and prices would remain depressed until the monsoon season ends in September.
"The demand for sugar generally falls during the monsoon season as consumption of products such as soft drinks goes down in this period," Jain said.
Some industry officials said that even during the festival season, prices of sugar would not rise significantly.
"The government has plentiful stocks of sugar," Jain said. "Even if there is a surge in demand, the government can release adequate stocks. We have extremely comfortable stocks. I don't seen any good reason why sugar prices should go up."
The foodministry last month released additional sugar stocks for sale in the July-September period. The government has said that with plentiful stocks in hand, it would not hesitate to release additional stocks "in case the requirement so dictates".
According to trade officials, India produced 12.57 million tonnes of sugar between October 1997 and May 1998 compared with 12.74 million in the same period a year earlier.
Traders expect sugar output to be about 12.75 million tonnes in 1997/98 (October-September) against 12.9 million in the previous crop season."But in the 1998/99 season, we are expecting that output will rise to 15 million tonnes. There is a 10 to 12 percent rise in area under sugar cultivation," Jain said.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
