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Exporters not sure of doubling sugar sales
Friday, 10 October 2003, 19:30 IST
NEW DELHI: Indian sugar exporters are not too confident of being able to meet the government target of doubling overseas sales from the record level of 1.56 million tonnes during sugar year 2002-03, which ended on September 30.
This is despite the recent government decision to support exports by reimbursing handling and marketing charges at the rate of 
500 per tonne on shipments, a move that would involve an expenditure of about 500 million this year.
The reimbursement plan is amongst a series of government measures aimed at realising the target of 3.0 million tonnes exports during 2003-04, with 1.0 million tonnes within the first six months of the sugar year.
"Despite the government announcement last month and cabinet approval last week on the reimbursement plan, we are not sure of being able to meet the target set for this year," said S. L. Jain, director general of Indian Sugar Mills Association (ISMA).
This was mainly due to present low global prices, appreciation of the rupee and the high sugarcane price leading to high production costs, he said.
"Unless the government intervenes and makes an effort to push exports through state-owned agencies to complement our efforts, we will not be able to double exports," Jain told IANS.
Over the last one year, the Indian rupee has appreciated six percent against the dollar.
In addition, in the last one-and-a-half years, surplus global production has seen sugar prices sliding from the heights of $250 per tonne to $230 and now to $180.
Unlike the Indian currency, major competitor Brazil has been gaining an edge with the depreciation of its currency. In just five years, Brazil's sugar exports have gone up from two million tonnes to over 13 million tonnes.
In Thailand's case, exports have gone up from around 4.5 million tonnes to 7.0 million tonnes last year with government providing support to farmers. Thailand has, in fact, emerged as the largest sugar exporter in Asia.
While India's exports have gone up from 1.2 million tonnes in 2000-01 to a record 1.56 million tonnes, exporters are facing tough competition with rising production costs and dipping global prices.
"The present scenario does not augur well for our achieving a target of 3.0 million tonnes unless the government steps in to support exporters efforts like in Thailand and Pakistan, where the state-owned trading corporation has been procuring supplies for exports through open bids," said Jain.
In addition, exporters are still waiting for the reimbursement plan to be implemented. It will help neutralise the impact of rupee appreciation, said Jain.
For the sixth consecutive year, India has opened the sugar year in October with a surplus stock. This year, it is around 11 million tonnes, sufficient to meet the domestic requirement for over eight months.
Last year belying low expectations, India recorded a high 20.2 million tonnes production, as against domestic consumption of around 18 million tonnes.
In 2003-04, India is expecting a marginal decline in production to 19.5 million tonnes due to the drought less sugarcane cultivation in Maharashtra. Last year, the Maharashtra government had intervened to prop up domestic prices by giving subsidy to push exports.
One of the largest producers and consumers of sugar, India is nonetheless in a surplus situation.
"The current scenario is not very favourable for pushing sugar exports with major competition being faced on cost front from Thailand and Brazil," agreed Pradeep Mathur, senior manager of Indian Sugar Exim Corporation (ISEC).
During 2002-03, Bangladesh was amongst the major markets India benefited from despite Dhaka stopping imports for a few months from April.
In 2002-03, India was able to supply 200,000 tonnes sugar to Bangladesh mostly from Uttar Pradesh sugar mills.
"After Bangladesh, Indonesia and Malaysia seem to be strong markets where we see possibilities of exports," said Mathur.
Source: IANS
500 per tonne on shipments, a move that would involve an expenditure of about 500 million this year.
The reimbursement plan is amongst a series of government measures aimed at realising the target of 3.0 million tonnes exports during 2003-04, with 1.0 million tonnes within the first six months of the sugar year.
"Despite the government announcement last month and cabinet approval last week on the reimbursement plan, we are not sure of being able to meet the target set for this year," said S. L. Jain, director general of Indian Sugar Mills Association (ISMA).
This was mainly due to present low global prices, appreciation of the rupee and the high sugarcane price leading to high production costs, he said.
"Unless the government intervenes and makes an effort to push exports through state-owned agencies to complement our efforts, we will not be able to double exports," Jain told IANS.
Over the last one year, the Indian rupee has appreciated six percent against the dollar.
In addition, in the last one-and-a-half years, surplus global production has seen sugar prices sliding from the heights of $250 per tonne to $230 and now to $180.
Unlike the Indian currency, major competitor Brazil has been gaining an edge with the depreciation of its currency. In just five years, Brazil's sugar exports have gone up from two million tonnes to over 13 million tonnes.
In Thailand's case, exports have gone up from around 4.5 million tonnes to 7.0 million tonnes last year with government providing support to farmers. Thailand has, in fact, emerged as the largest sugar exporter in Asia.
While India's exports have gone up from 1.2 million tonnes in 2000-01 to a record 1.56 million tonnes, exporters are facing tough competition with rising production costs and dipping global prices.
"The present scenario does not augur well for our achieving a target of 3.0 million tonnes unless the government steps in to support exporters efforts like in Thailand and Pakistan, where the state-owned trading corporation has been procuring supplies for exports through open bids," said Jain.
In addition, exporters are still waiting for the reimbursement plan to be implemented. It will help neutralise the impact of rupee appreciation, said Jain.
For the sixth consecutive year, India has opened the sugar year in October with a surplus stock. This year, it is around 11 million tonnes, sufficient to meet the domestic requirement for over eight months.
Last year belying low expectations, India recorded a high 20.2 million tonnes production, as against domestic consumption of around 18 million tonnes.
In 2003-04, India is expecting a marginal decline in production to 19.5 million tonnes due to the drought less sugarcane cultivation in Maharashtra. Last year, the Maharashtra government had intervened to prop up domestic prices by giving subsidy to push exports.
One of the largest producers and consumers of sugar, India is nonetheless in a surplus situation.
"The current scenario is not very favourable for pushing sugar exports with major competition being faced on cost front from Thailand and Brazil," agreed Pradeep Mathur, senior manager of Indian Sugar Exim Corporation (ISEC).
During 2002-03, Bangladesh was amongst the major markets India benefited from despite Dhaka stopping imports for a few months from April.
In 2002-03, India was able to supply 200,000 tonnes sugar to Bangladesh mostly from Uttar Pradesh sugar mills.
"After Bangladesh, Indonesia and Malaysia seem to be strong markets where we see possibilities of exports," said Mathur.
Source: IANS