The Indian sugar industry is facing a great menace. The industry is feared that the current sugar season will close with the industry saddled with over 10m tonnes of surplus sugar which will obviously be carried over to the forthcoming sugar season (October ’00 – September’01). As a result, the new sugar-season is likely to start with a stock, which is equivalent to nearly eight months’ consumption.
It is reported that, in the past also the industry has suffered such a major crisis. But the problem this time is worse. Although the industry has been allowed to export one million tonnes of sugar to reduce the bulging stock, exports too will not be remunerative for sugar mills with the current international price ruling at about $240 a tonne. At this price, Indian factories will be incurring a net loss of more than Rs.2,000 a tonne, sources said.
Industry analysis estimate that the country would start the new sugar season with an opening stock of around 101.2 lakh tonnes even as the sugar industry targets to produce 183 lakh tonnes in the current year. Incidentally, the current sugar season opened with a carry-over stock of 68.9 lakh tonnes. A section of the sugar industry fears that the opening stock in the new season may be even higher than the current estimate if sugar production during `99-00 over-shoots the target.
The industry sources argue that if the industry has to peg its output at 183 lakh tonnes during the current season, it is required to produce just 6.9 lakh tonnes during the remaining four months or 1.7 lakh tonnes on an average per month. According to industry sources it would be too much to expect that just 1.7 lakh tonnes would be produced per month during June-September, despite lower recovery rate during the lean production period and some sugar mills going gradually out of production after May.
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