NEW DELHI: India is heading for a “worrying” sugar surplus in 2011/12 and the government should help by allowing four million tons of exports and buying two million tons to trim stocks, the head of a producers’ body said.
Output for the world’s second-biggest producer after Brazil is expected to be 26.5 million tons in 2011/12, Jayantilal B. Patel, president of the National Federation of Cooperative Sugar Factories Ltd. (NFCSF), told an industry meeting.
In 2010/11, India is likely to have produced around 24.2 million tons and with demand of around 22 million tons — making it the world’s biggest consumer — the government has already allowed unrestricted exports of 1.5 million tons.
“This expected surplus production of sugar during 2011/12 is worrying,” Patel said.
The Indian Sugar Mills Association (ISMA), another producers’ body, shares Patel’s 2011/12 output forecast, as does Farm Minister Sharad Pawar.
However, Food Minister K.V. Thomas recently estimated output in 2011/12 at 24.6 million tons.
“The sugar year 2010/11 has been a year of surplus production after two years of deficit. I shudder when I visualize what the situation would have been if the government had not permitted exports of 1.5 million tons in three equi-tranches,” Patel said.
Thomas last week said the government would take a call on permitting overseas shipments only after Diwali, the festival of light, in October. Sugar consumption peaks during the Diwali as sales of confectionery and traditional gifts of sweets soar.
Local sugar prices have fallen 6.5 percent since January while international benchmark London white sugar futures have lost nearly 18 percent.
By REUTERS
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