Sees highest-ever closing stock of 158 lt at the end of current crushing season

The National Federation of Cooperative Sugar Factories Limited (NFCSF) has insisted that sugar mills need government support in the form of subsidy to export sugar in the absence of which the industry is bound to a face major crisis.

The opening stock of 107 lakh tonnes (lt) sugar and estimated new production of 311 lt against the backdrop of plateaued domestic consumption of 260 lt will result in the highest-ever closing stock of 158 lt worth 50,000 crore at the end of current crushing season, NFCSF estimated. Without export subsidy mills will enter into permanent financial sickness, it said.

NFCSF has responded to views expressed by sugar traders that mills must start exporting sugar without waiting for government subsidy and take benefit of higher rates in the international market.

Global price rise

“The current surge in global prices are mainly due to two reasons — Brazil’s, excess 100 lakh tonnes sugar was not shipped out in time due to Covid issues at Brazilian ports and secondly the ambiguity in India’s policy of sugar exports for 2020-21. Both these factors are temporary and not based on fundamentals which clearly shows a global surplus scenario”, the NFCSF added in a note.

Sugar industry players say that the Centre had positively and timely responded to the appeals of the industry in announcing sugar export schemes with fiscal incentives. As a result, India could export 6.25 lt in 2017-18; 30 lt in 2018-19 and a record 57 lt in 2019-20. This helped to pare inventory, easing liquidity and containing cane arrears to a great extent, according to the industry.

Indian mills have explored new markets for its sugar in Iran, Korea, Malaysia, West Asiaand niche markets of the African continent apart from traditional markets of Indonesia, China, Bangladesh and Sri Lanka. Indian brand penetration in these markets has very well been attained, said NFCSF.