Pressure on Centre to import sugar

NEW DELHI: Political pressure is mounting on the government and the empowered group of ministers (EGoM) to okay the import of around 5 million tonnes of sugar within the next four months.

Indeed, food and agriculture minister Sharad Pawar himself acknowledged earlier this week that the country could be facing a supply shortage of 9 million tonnes of sugar in the 2009-10 cane crushing season.

In the wake of soaring prices and acute supply shortage, Congress leaders from Maharashtra, the country���s largest sugar producer, have urged the government to take a priority decision. They want the immediate import of at least 2.5 million tonne of sugar for this year and another 2.5 million tonnes for 2009-10 before international prices shoot up further.

Indian traders reportedly staked about 5 lakh tonne of Brazilian raw sugar in the last 10 days to exploit a drop in New York futures, which helped push up Thai premiums to 50 points, their strongest show in more than a month on Wednesday. The Brazilian sugar was offered at a discount of 100 points under New York���s October contract.

���Brazilian sugar makes up for the majority of India���s purchases. That���s probably what���s supporting the market; whenever there���s a drop, there���s a bit of Indian buying,��� a Singapore dealer said.

���The government has little option but import or else it risks paying a much higher price for sugar later. It cannot except the private sector to import huge quantities at prices that exceed production costs,��� Maharashtra Congress leader Kanhaiyalal Gidwani said.