The Centre should not permit imports of sugar this year (October 2016-September 2017) as output may outstrip demand, said Palani G. Periasamy, president of South Indian Sugar Mills Association.
The current season started with an opening stock of 7.7 million tonnes and the production this year is expected to be 20.3 million tonnes. The total sugar consumption will be about 24 million tonnes and the closing stock for the current season is estimated to be four million tonnes.
Though production has been hit in south Karnataka, Andhra Pradesh, and Tamil Nadu because of drought, it is expected to be high in Uttar Pradesh this year.
Mr. Periasamy said the domestic industry was reviving after three years of a sharp drop in prices, the demand has stabilised, and the current demand-supply position is expected to be comfortable.
“The industry is just recovering and we should not disturb it. Should there be a need for imports, it can be reviewed after a couple of months. But, we estimate there will not be a need for it. If we import, the market sentiment will push down the domestic prices and local mills will not be able to download the stocks,” he said.
Production in Uttar Pradesh this year was initially estimated to be 8.3 million tonnes. But it might go up to 9.5 million tonnes. “This season we expect bumper production in Uttar Pradesh,” Mr. Periasamy said.
Usually, sugar produced in the south is supplied to the northern States too. But, this year, with production affected in Tamil Nadu, Karnataka, and Andhra Pradesh, supply to north India might not be there.
“But, there will be no shortage,” Mr. Periasamy said. Further, sowing is said to be good in Uttar Pradesh and Maharashtra. Hence, sugar arrivals will start early next season.
The current season began with ex-gate prices hovering around ₹27 a kg and the prices now are ₹37-₹38 a kg. “Any price increase in the future will be moderate and even if it goes up, it will be less than the international prices,” he said. The production cost was ₹36.50 a kg.
