INTERVIEW – India hopeful of reaching close to its sugar export target despite COVID-19, says ISMA

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A farmer in India's Maharashtra state transports sugarcane. Photo/IAC

The Indian sugar industry is hopeful of reaching close to this year’s sugar export target, according to the Indian Sugar Mills Association (ISMA), Ritwik Sinha reports.

Indian sugar millers expect exports to come in just short of the target set at the beginning of the season despite challenges posed by the national lockdown and a significant decline in global trade,

ISMA said it was hopeful that exports would clock between 5-5.5 million tonnes this sugar year against a target of 6 million tonnes.

Abinash Verma
Director General, ISMA

“We can still do it. We are expecting major demand from Indonesia as their main sourcing market for sugar Thailand has seen a steep production decline to the tune of 7 million tonnes this season, Abinash Verma, ISMA’s Director General, told indoasiancommodities.com in an interview.

The Indian government is likely to re-allocate export quota license in the next 7-10 days, awarding surrendered quota to those who are willing to sell in the international markets,” Verma said.

The deficit in global sugar supply in the current year is expected to be in the range of 8-9 million tonnes due to COVID-19 shutdown and economic slowdown.

India had exported 3.8 million tonnes of sugar during the marketing cycle in 2018-19 as against the mandatory quota of 5 million tonne. According to an industry estimate, the contracted sugar quantity for exports from India till middle of April was close to 3.2 million tonnes.       

To boost sugar shipments from India in the current year, ISMA has also sought the intervention from the government to be allowed to use Kakinada SEZ as the exports base. 

“If it happens, it will easily contribute 3-4 lakh tonnes of additional sugar exports taking our total volume in the current season in the range of 5 to 5.5 million tonnes,” Verma said.

Speaking on the dip in The demand in the domestic market had fallen steeply due to the lockdown that is now in its sixth week, Verma said.

“The demand in the last 45 days has come down by 1 million tonnes. But we are hopeful that once the lockdown is lifted, there would be a fresh spurt in offtake from the sugar mills particularly from institutional businesses and also traders who do not have in their pipeline,” he said.      

Sugar production at the end March — the half-way mark of the current season — had shown a dip of 22 percent – 232.74 lakh tonnes as against 296.82 lakh tonnes in the corresponding period last year. 

ISMA had said in an earlier statement that it had assured enough availability of sugar with the sugar mills to take care of domestic demand.

Responding to the issue of arrears to the farmers which is estimated to have crossed Rs 15,000 crore, Verma maintained that the industry is saddled with serious liquidity crisis with off-take hurdles witnessed in the recent past. 

“We have asked the government to expeditiously clear some of the pending subsidies – export, buffer stock, interest subsidy on soft loans etc. Cumulatively, they amount to over Rs 8,000 crore and they should be allocated to the food ministry so that we can claim and avail as soon as possible. It will reduce our financial burden,” he said. 

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