New Delhi: Sugar prices are expected to remain under pressure due to an estimated supply gap of 3.5-4 million tonnes in the next marketing year starting October, former Agriculture Minister Sharad Pawar said today. The Nationalist Congress Party (NCP) supremo also asked the industry to be prepared for any government action, including possibility of import of raw sugar to boost domestic supply and check prices.
“This year, sugar production situation is good. But I don’t see similar situation in the next year. In 2016-17, there will be 3.5-4 million tonnes gap in demand and supply,” Pawar said at the 74th annual convention of the Sugar Technologists’ Association of India (STAI).
Sugar rates, which at present are ruling in the range of Rs 34-38/kg, may come under pressure due to a likely gap in supply and demand, he said.
“Next year, with a gap of 3.4 to 4 million tonnes of sugar, there will definitely be an impact on prices and the government will take some steps and the industry should be ready for that,” he noted.
The government has projected sugar output to decline to 23-23.5 million tonnes in 2016-17 marketing year (October- September), as against 25.1 million tonnes in the current year. Meanwhile, industry body Indian Sugar Mills Association (ISMA) has pegged sugar output at 23.26 million tonnes for next year.
Pawar said the country’s sugar demand is around 25.6 million tonnes and is expected to grow at 3-4 per cent per annum. By 2020, sugar demand is pegged at 30 million tonnes. Apprehensive about the government’s policies to check price rise in sugar, Pawar asked the industry to be prepared for the possibility of sugar imports.
“A suggestion has been made to import raw sugar to bridge the gap. There are other alternatives and I hope the government will take appropriate action,” he said. To curb price rise in sugar, the government has recently imposed 20 per cent export duty on sugar and withdrawn cane production subsidy to the mills.