Sugar groups call for govt sops to tide over crisis
Sugar stocks in India may continue to be in surplus for two more years and the government must abolish taxes and raise buffer stocks to help millers tide over the crisis, sugar groups said.
By PTI |
MUMBAI: Sugar stocks in India may continue to be in surplus for two more years and the government must abolish taxes and raise buffer stocks to help millers tide over the crisis, sugar groups said.
In the absence of incentives, sugar millers could take a long time to recover from the bearish cycle created by the current surplus of 5 million tonnes and further signs of a glut, industry experts said.
"The surplus situation in India is unlikely to change before 2008/09," Shivajirao G Patil, chairman of Indian Sugar Exim Corporation Ltd, a joint venture between two sugar associations, told media agency.
"If new measures are not taken, the mills will take four to five years to cover their losses," Patil said adding, millers were incurring a loss of Rs 300 per quintal.
He said the federal government levied an excise duty of 85 rupees per quintal and state government charged varying rates of purchase tax, leading to an average burden on a sugar miller of Rs 150.
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Indian Sugar Mills Association (ISMA), on its part, wants a 3 million tonnes increase in buffer stocks, the quantity retained by miller on behalf of the government, besides encouragement for export of raw sugar and value addition.The government has already created a buffer stock of 2 million tonnes and started giving export subsidy.
"Value addition in sugar should be stressed... Allowing 10 percent ethanol blend in automobile fuel will absorb about 1 million tonnes of sugar," said P Rama Babu, president of ISMA and managing director of EID Parry (India) Ltd.
India is likely to produce 27 million tonnes of sugar in 2006/07 of which the domestic demand is about 19.5 million tonne while 1 million tonnes of sugar is likely to be exported.
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