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Anshuman Daga
Calcutta, Jan 6: The country's embattled sugar industry is headed for disaster unless the government takes urgent steps to combat cheap sugar imports, a senior official of a leading sugar mill said on Wednesday."Even though India is the lowest cost producer, the nation is being dumped with unnecessary sugar," Vivek Saraogi, managing director of Balrampur Chini Mills Ltd said in an interview.
"If imports continue in this manner, I see disaster ahead.""Instead of consuming stock from our godowns (stores), we are allowing stocks to come from outside," he said.
Balrampur is one of India's leading sugar millers.
The sugar industry has urged the government to raise import duty on sugar but a decision has not yet been finalised.
In April, India imposed a five per cent customs duty on imported sugar, but trade officials said this was not sufficient to counter the huge imports."This is sugar from high cost producers which is being dumped into India by way of huge subsidies given by their countries," Saraogisaid.
Traders have registered for the import of 1.7 million tonnes of sugar up to November 30, data provided by the Agricultural and Processed Food Products Export Development Authority showed.
Traders said Pakistani sugar would comprise a major chunk of imports into the country.
Saraogi said sugar exporting regions like the European Union and Pakistan were subsidising sugar exports.
"We are not looking at protection... If somebody is producing at a higher cost, they should not be allowed to dump it here."
"If the industry languishes, we will have the same cycle whereby producers will lose money, farmers' payments will remain in arrears and they may shift their crop from sugarcane. And when production becomes low and you have vibrant demand, the prices will be high," he said.
Domestic sugar prices were running at $300-305 per tonne ex-factory, traders said. International prices were about $240 per tonne, they added.India does not regulate imports but local producers are subject to governmentcontrol.
They are required to sell 40 per cent of their output to the government at state-determined prices for sale to the poor through a public distribution system. This is below cost of production, industry officials say.
The other 60 per cent can be sold at market rates. "What we are asking for is a level playing field," Saraogi said.
The Indian sugar industry comprised about 450 mills and employed about 45 million people, about seven per cent of the rural population, he said.He played down fears that a rise in the import duty would lead to a price rise.
A mere additional release of 50,000 tonnes of sugar could quell any amount of speculation, Saroagi said.
India had stocks of about 5.5 million tonnes as of October 1, 1998, two million being surplus, he said.
The industry was also getting hit by high import duties of up to 300 per cent in other countries, Saraogi said.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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