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Publication: The Indian Expressl Edition: Ahlnedabad Date: Novelnber 21,20191 Page No: 091Food & Agriculture HARISH DAMODARAN HU .. C 'ElI1 1. N OV EM BER ZO FOR TilE In cl ian sligar industry. the WOrl! seems wcr. ,\Ithoogh the curn?nt 2019-20 suga r yea r ( Oclllbcr-Scptcmber) .... 1th fl:(ord s [(xks ofover 14 milliooronnes (mtj-equiv- alent to six -and-a-half months of domestic consu mpuon -the ray of hope is from tight- cnong global su ppli es. making larxe-sGl le ex- pons fr om the rounrry J via ble proPOSItion. In 20 1 8- 19. India 's sugar output as well ilS StOl i<S hit all·time-highs <i 33. 16 rnt and 14.27 mt . [see table 1). ·I hi s. inordinaryrircumsrances.would have spe iled disastaboth for mill, (alre.dy bur- de ned bylowsugar realis aoons)a nd fa rmers : net receiving full or time Iy payme nt fort heir c. lnc ). Mill s in Utta r Pradesh (UP ). as on November 1 9. are to still pay Rs 3.660.90 crore out of the IOtal Rs 33.048.03 crore v\'orth ofea ncbought from in 2018- 19. even as they have commenced crushirut lOr th<. · new 20·19-20 ;cason Out this gloomy dome stic glm scenario - m mpoon<ied by near-Ilat consumption 10 ye ars. apparently n?nectingglUwing he.l!th con scio usness and reduced offtake bv indust ria l use rs. induding beverage. s\o,·ee nnea choroklte.confectionery. bis("uit and ice-cream makers - is being partlyoff· set by a developinj(global dertcit. The US·basedco mmodity.Jnalytics firm Tropical flL: se arch Servi ces· ha s projected world raw sligar productton in 2019-2 0 to fall sho n of consu mpt ion by 11 .90 mt. a marked llltnaround from the surplus of 10.52 mtonlyrwoyears ago.Moreoyer.c1os- i ng st oc ks , at 432% 0( co nsumption. v.uuld be t he lowest since 2010- 11 (see rable 2 j. "rhis b a grea t opponunity for us to cx- po n and it ro ul dn't ha ve come at a bener time. when we aresaddledwith so much of stocks." say s PrakdS h Naiknavarc . rna nagin g di re ctor of the National r-ederation of C(loperative Sugar Factortes . Sug'lI expom from In dia amounted to 3.8 mt in 20 18-1 9, lower than ule rargeted 5 mt. forthecurre nt sugar Yl' ar. the Narendra Modi s allocate d export quo- tas to mills aggregating 6 mt. apart from a three-month exte nsi on till {),cember 31 to discha rge their balan"" 1 .2 ml commirmcnt for20IS-19.Together. they add up to ·/2 mt, way above the highest - ever shi pm ents 0(4.9f) mtathieved in 2007 ·08. ··It is astiHlawt "ad mit s N aiknavan? ··but the gooct thing is that the international mar- l<et looks much more cOflducive and the y:JV- cromen t has ann ou need an adequate export incentrve well before the start of this season '", ·the Modi gavcmmem.mScptember 12 .no- tined a new 'Wor kl Trade Organisation (WTO )-c ompatible· scheme providing a l ump-sum assis lanO? totaling Rs 10.448 per toone t(MII rds rna rl<cting. internal transport. port h andling and DO: an freight expense s in- l1JITed onexpon: ofsuga r. '[he scheme, lim i- ted ID the IThlXI mum ad missible exportquan· tity Ofb on for all mills. woul de nrail a fi sca l cost of about Rs 6.269 crore . La. st year. the noofi eatioo for facilitating exports was issued only on October 5. Further. the in cent ive package included an assistance of Rs 13.88 for every quintal of ca ne rrus hefl and a payme nt to defray ex- penditure ttMartis internal transport freight handling .1nd ot her exporr.rclateitctlarxes. ·Ihe latter payment was lip to Rs 1.000 per tonne of sugar for mi lls located 'A1thin 100 km from pomaRd Rs 3.000ltonneforthose beyond 100 kmin non-coastal states. ·· It was too com plicaled. with procedural hurdle s and excessive doc umentation re- qui reme nts for making claims. The new srheme issimple :Yousimplyexporrand ge t a flat incentive t>f Rs 10.448 tOr every kg of sugar gtl ngoul.Also. what is beinggiven is a lump-sum assisrance and not reimburse- which can be chal· lenged at the WTO. And it has been an· Iloonu.'<i early enough to plan our proctuction forexpom .. · not es a UP -based mIller. India n mi ll s. il is le arn ed. have already GLOBAL OPPORTUNITY Shipping out trouble India's sugarexpOlts are set to hit a record high this year, providing some respite to the beleaguered industry . ' ,,, . • 2010-\1 24394 0 207.69 26.00 57.29 2011 - 12 263.43 0 220.00 33.90 66.82 20U-13 251.41 7.25 230.00 3A8 92 2013-14 243.6 1177 244.27 27.82 75.28 2014-15 28113 1236 256.55 23.02 91.2 2015-16 251.25 0 2485 77.25 2016-17 202.62 4.48 244.48 0.46 39Al 2017-18 323.28 2.24 254.50 632 104.11 2018·19 331.61 0 255.00 , 38.00 142. 72 ·Orwber·Seprembi'r, •• Yeur-em/. SOlltl."t': NCJ bona I "' t'de ttl t ion c.(Cooperudvc SUb'CIr kKcorio e on mnp on otp 0 (1) (2) (1-2) -Use:\> 2010- 11 166827 166. 142 0.685 5.297 42.9 45.1 2011-12 2012-13 2013-14 2014-15 2015-16 2016· 17 2017-18 2018·19 2019- 20 174.190 183.318 181533 181.853 175. 082 178,329 193.702 185.110 175.682 168.893 172 .779 176.388 179.350 18113O 181.807 183.177 185.089 187582 10.539 49.8 5.145 Sl .6 2.504 51.7 -6.248 47.7 -3.479 45.6 10.524 SO.7 0. 021 50.2 -11899 43.2 Source: Irupil.. T.l l Scrvi::('.s contracted 13 mtofsugarforexports dur - ing this seaso n. A significa nt quantity ofitlS raw brown. as opposed to white refined. sugar. The normal crystal white sugar pro- ducedby tndian mi lls hasan 'ICUMSA value' of OllCr 100. The markPt for it is limited. un- like the more 'A1 dely tr aded highly,efi ne d sugar of 45 ICUMSA grade (the 1 0Wl' r th e ICUMSA. the more the whiteness ). "Our r;m sligar (rom fresh cane. crushed 'A1thin 12 hours ofharvesring. is free of dex- tTan (an undesirable compound re sul ti ng from microorgani sm·induced biodeteriora- tion)and "i th GOO-l.000 ICUMSA.There IS a good demand now/or it.esper:i allyfro m re- fi neri es in United Alab Emirares . lndonesia. Malaysia. Bangladesh. China and South Korea that largely source Brazili an raw sugar . Since the Brazilian sugar season startsoniy in April-May. _ have a six-month time 'A1ll- dow to leverage :· points out Nailmavare. Iran . too. is reportedly buying significant quantities from India. The I.slamic republic; which has blocl<ecllrom the global n .. nanciab-ystem due to US-impascd economic sanctions. is using the rupees earned from sale <i oil toimport sugar. rice. tea. sayabean mealandothercommodilics from India. · ·l 'verythmg's falling in pLlce. Not only are we in a better position ro aport butt he gov- errunentalsodese"", s credit forcomingoul with d practical and well-timed scheme. It allows us to begin the season by producing raw sugar andenr.,r into back-to- back contr am with importers: observes the earlier-quOled UP mil ler . Even in Maharash- tra, the delayed stan due to hea"Yunseasonal rains - mills wiU crush only from Novem ber n - maybe a b1essingofsorts.asitgives lee- way to take up producti on of raw sugar maighGlwayfor dispatching to the ports rather than storing in factolY godown s. Raw sugar is currently trading in New York at roughly 12 .8 cents per pound. The rate would be higher. at 13.3 cents or Rs 21/kg. for Indian sugar, which fell:hes a 4.05% ·polarisation premium· rorextra s uo crose content Adding the Rs 10.5 incentive and deducting Rs 2-2.5 towards bagging. transport and port handling chaljles. mills wauld Rs 29-295 per kg from exports. Thb is bekm of Rs 315-32.5 for white sugar. But raw sugar production costs ate also Icmer by R.5 l lkgor so. as mills save on lime. sulphur and add;' tiona I steam-cum-p.rocessing charges. Besides. thegovemment rOO!S monthly quo· tas sales in the domestic market whereas there are no such restrictions on export of sugar. Fasterliquidation translares into sav· ings in imerest and GlrlYing costs as well . The im proved pros peas for cXPlXts. how- ever. donot tr.Inslateinroan end rotheindus- try' s woes. The srate advised pri"" ( SAP) for sugarcane in UPh as gone up only marginally from Rs 300-315 to Rs 310-325 per quintal and201S·19. with mills struggling to p,¥even that The VogiAditya- nath administration has net declared the SAP for the current season. despite 87 out of the state's 119 mills already crushing 5.85 mt of cane and producing 0.58 mtofs ugar till now. In Maharashtra . drought in the Marath- wada-Solapur-Ahmednagar region till August, atongside unprecedented flooding in the main southern sugar Kolhapur du ring Iate-july l early -l'ugust and heavy unseasonal rains across the state af- terSeptember, hastakPn a heavy toll on pro- ducoon itself. Maharashlra's sugar outputis likely to pi unge to 5.5-6 mt in 2018- 19. irom last Yl'ar 's record 10. 72 ml I'or the moment. exports arc the sole bright spot (or Indiansugar.
