Even as the Centre is considering the proposal to allow imports of 3-5 lakh tonne of sugar to boost supplies in the build-up to the festival season, a huge hue and cry has erupted on the issue, forcing different sugar producing states to take polar positions. While mills in Tamil Nadu and Karnataka are seeking permission for duty-free imports of raw sugar under the tariff rate quota system, which, they say, will help improve their capacity utilisation and also bridge the demand-supply gap in the region, those in Maharashtra and Uttar Pradesh — the two top sugar producing states — are vehemently opposing the move. According to early estimates, Tamil Nadu is heading for a straight fourth drought year and Karnataka, too, is foreseeing a dip in sugar output due to deficient rainfall. As a consequence, both the states are asking for the permission to import raw sugar at zero duty, which can be processed along with the juice from the cane they would crush in the 2017-18 sugar season.
As a consequence, both the states are asking for the permission to import raw sugar at zero duty, which can be processed along with the juice from the cane they would crush in the 2017-18 sugar season. However, with Uttar Pradesh expecting a sugar surplus year, with an estimated production of 100+ lakh tonnes and Maharashtra, too expected to produce 74 lakh tonnes, the country is looking at a production of 251 lakh tonnes. However, if imports are allowed, it would unduly put pressure on the mills of these two states, which may then find it difficult to cover the cost of sugarcane. To avoid this clash between the sugar producing states, the Indian Sugar Mills Association (ISMA) has written to the food secretary asking it to help the sugar mills in the southern states by moving raw sugar from Maharashtra and Uttar Pradesh to these states by covering the transportation cost or providing a subsidy.
“On behalf of our members from Tamil Nadu, we in ISMA are requesting you for helping the sugar mills in this moment of crisis. We feel that if some surplus sugar could move from UP and Maharashtra to the tune of at least 6 lakh tonnes, it would not only help in improving the availability of sugar in southern India but also help in capacity utilisation of the mills in TN and help reduce their losses,” said a letter written by ISMA president T Sarita Reddy. Seeking the Centre’s help, the letter states that member sugar mills in surplus states are willing to make raw sugar and supply to Tamil Nadu, but since transportation cost will be anywhere around Rs 3,000 per tonnes, it would becomes totally unviable.
In fact, worried over the prospect of the Centre allowing imports, West Indian Sugar Mills Association, an association of private sugar mills in Maharashtra, Goa and Gujarat has also written to the food minister, requesting him not to allow import of either raw or white sugar as it may lead to a fall in sugar market prices and create financial difficulties for cane payments to farmers in the next season.