With sugar production projected to fall for the second consecutive year because of poor monsoon, which could further aggravate the price situation, union food and agriculture minister Sharad Pawar has sought a special meeting with the Prime Minister on August 17 to discuss issues relating to soaring sugar prices and gloomy picture ahead for the industry.
?An appointment has been sought with the Prime Minister, though a formal confirmation is still awaited,? sources said.
The meeting comes at a time when world sugar production is dwindling to 1,490 lakh tonne in 2008-09 against 1,690 lakh tonne in 2007-08, while in India production is projected to be as low as 150 lakh tonne in 2008-09 against 264 lakh tonne of 2007-08. ?The PM will be apprised on rapidly increasing sugar prices; inadequate raw sugar imports because of surge in global prices, implementation of stringent action against speculators and hoarders and above all dip in the sugar production in 2008-09 and also in 2009-10,? source added.
Sugar production will continue to be less in 2009-10, which will lead to unprecedented price volatility. Industry sources said white sugar prices have touched $537 per tonne FOB and raw sugar $485 per tonne FOB. The domestic prices are fast approaching Rs 30 per kg ex-mill thereby pushing it to Rs 32 per kg at the consumer level.
?The reason in spurt in sugar prices has not been the fundamentals but largely speculation. Fund managers worldwide are driving these prices. The government though has talked tough against speculation and hoarding, it should be expedited across the country,? traders said. In a bid to ensure domestic availability of sugar, the Centre on July 31 extended the date for import of duty-free raw sugar under Open General Licence (OGL) by sugar factories till March 31, 2010.
However, sources said that this could only have a limited impact on improving availability as global raw sugar prices have shot up since them to touch a 28-year high of around 20 cents per pound.
Meanwhile, the worried sugar industry has swung into action and decided to hold a brainstorming session in Mumbai to take stock of the situation and discuss future course of action.
The Federation of Cooperative Sugar Factories in Maharashtra, a representative body of over 170 cooperative mills has organised a two-day session on August 13 and 14 wherein representatives of cooperative and private mills and state sugar commissioner will discuss threadbare present state of affairs and measures to keep the industry floating.
Managing director of Federation Prakash Naik Navare said the industry representatives during the ensuing exercise are expected to bring about a unanimous solution.