Government should expedite bilateral talks to push sugar export: ISMA

NEW DELHI: Amid global glut, industry body ISMA today asked the government to expedite bilateral talks with neighbouring nations like Sri Lanka to ensure that export of 3.2 million tonnes of surplus sugar takes place this year.

To liquidate surplus stock, the government has made it mandatory for sugar mills to export 3.2 million tonnes of sugar in the ongoing 2015-16 season (October-September).

If the export quota is achieved, sugar stocks in the country are expected to come down to 6.5 million tonnes at the end of the current season, ISMA said.

Stating that the export target is challenging, Indian Sugar Mills Association (ISMA) President A Vellayan said the market for white sugar is largely restricted to Sri Lanka, West Asia and African countries.

"It is certainly possible for us to export upto 1-1.2 million tonnes of whites this year with the government taking proactive steps in pursuing bilateral trade discussions with these countries. This process has started and need to be taken to its logical conclusion," he said.

The balance quantity of about 2 million tonnes will need to be exported as raw sugar, he added.

Vellayan further said that the country currently has no access to the export market of 10 million tonnes as biggest importers China, Indonesia, Bangladesh, Malaysia among others have stopped importing sugar from India, he said.

The government has taken steps to explore these markets and find ways to negotiate to give "preferential treatment" to Indian sugar, he said, adding that it is a time consuming process but the discussions are happening.

ISMA chief also said that there should be a "preferential import duty on Indian sugar" by Bangladesh and Sri Lanka, which together used to import around 2.2 million tonnes annually from India.

"We understand the government is aware of this and is working to achieve the same. We would request you to use your good office, so that his happens as quickly as possible, to help us export a part of the targeted 3.2 million tonnes this year to Bangladesh and Sri Lanka," he added.

Since exports are competitive at present due to high cane prices, Vellayan suggested the government to compensate losses indirectly from a Price Stablisation Fund to farmers this year. "This will ensure a viable industry and that farmers get their cane price on time," he added.

India is all set to produce surplus sugar for the sixth straight year at 26-27 million tonnes in 2015-16.