The Hindu Business Line : Sugar inventories may top 110 lakh tonnes next year

Chennai April 16 The sugar industry could be saddled with stocks exceeding 110 lakh tonnes at the end of the next season in September 2008 going by the current production trends, according to a presentation made at a conference.

Production estimate

Sugar stocks at the beginning of the current season (October 2006-September 2007) were 44.59 lakh tonnes (lt) and at the end of the season, the carryover stocks could be 84.59 lt, the presentation made at the Sugar Summit and Bio-ethanol 2007 in Mumbai last weekend. The summit was part of the Grains Conference and Mr Praful Jagjivandas Vithlani, currently President of the Bombay Sugar Merchants Association, made the presentation.

For the current season, taking into credit a production estimate of 250 lt, the total availability would be 294.59 lt. Of this, domestic consumption is expected to be 195 lt, while exports are projected to be 15 lt. After this, the industry is expected to carryover 84.59 lt to the next season, according to Mr Vithlani.

The estimate has been arrived at taking into account the initial projection. However, the Centre has revised its sugarcane production estimate and it is likely that sugar production could even touch 270 lt.

Export projections

Mr Vithlani's projection was made before industry experts, players and traders and there seemed to be agreement on the view at the presentation.

Again for the next season, he has put the production estimate at 260 lt, thus resulting in availability of 344.59 lt. Consumption next season is seen at 205 lt, while exports could be around 25 lt.

This, according to Mr Vithlani, would result in carryover stocks of 114.59 lt at the end of the next season.

According to him, exports till September next year could be around 40 lt going by the current trends. The stock limit portends a grim scenario for the sector.

Remedies suggested

Various industry players during the summit voiced concern over the glut and said the sector was going through one of its toughest periods. However, the Indian Sugar Mills Association President, Mr P. Ramababu, said the industry would be able to ride through the rough period.

Among various remedies suggested at the summit include allowing the industry to process the cane directly for ethanol; producing more raw sugar for exports, increasing buffer stock and taking out sugar from the purview of the Essential Commodities Act.