UP likely to lift restriction on raw sugar import

Written by Deepa Jainani | Lucknow | Updated: Jan 5 2010, 09:32am hrs
The sugarcane farmers in Uttar Pradesh seem to be having the last laugh. After a prolonged battle with both the Central and the state government over fair and remunerative price (FRP) and state advised price (SAP), they seem to be inching nearer to their initial demand of supplying cane at Rs 280 a quintal.

And with farmers more or less content, the Mayawati government is toying with the idea of lifting the restriction on the import of raw sugar in the state.

Sources said the state government has started collecting data on the quantity of raw sugar that has been contracted by various sugar companies and at what price.

It is also noting as to how much raw sugar is waiting at the warehouses at various ports in the country.

The farmers initial apprehension that they will not get competitive prices for their standing cane crop if raw sugar import is allowed has been laid to rest and most farmers are already getting handsome returns. And keeping in view the shortage of sugar in the country, the state government is keenly viewing the possibility of lifting the restriction, a senior government official said, adding that the worsening law and order situation that had forced the state government to impose the restriction, has eased to a large extent.

It may be mentioned that the Centre has repeatedly asked the Uttar Pradesh government to lift the restriction on the import of raw sugar from Brazil as it is creating huge scarcity in the market and thereby pushing up prices of sugar.

Citing the severe shortage and skyrocketing prices of sugar, the Centre has said that unless raw sugar is imported and released in the market, the shortage will not cease to exist.

As on Monday, the ex-factory sugar prices in the state are at an all-time high of Rs 4,000 a quintal.

Already, all the sugar mills in the state are officially paying a uniform price of Rs 220-225/quintal as against the Rs 165-70/quintal SAP announced by the state government, and in some areas sugar companies are unofficially paying around Rs 250 a quintal for poaching on the cane areas of rival sugar mills.

If things continue this way, we will be paying farmers Rs 280-300 per quintal by the time the season ends, said a sugar miller requesting anonymity, adding that due to the dip in cane supplies, most mills are running at 50% of their capacity only.

However, the only consolation for the industry is that the satisfactory prices that farmers are now getting will induce them to sow more sugarcane for the coming year.

While this year marked a dip of almost 30% in the area under sugarcane, we expect a 15-20% extra spring planting of sugarcane from April onwards. This will, to some extent, lessen the acute crisis that we are facing this year, another miller said.

The recovery of sugar has also gone up a few notches this year, which will slightly add up to the overall sugar production in the country.

Sugar recovery has moved up from 8.62% last year to 8.82%. This 0.20% rise will help in boosting up production figures to 16.5 million tonne as against the 16 million estimates done earlier, said a miller.

However, despite this, there will still be shortage as the demand of sugar is pegged at 23.5 million tonne and that needs to be met by processing of imported sugar, millers said.