Indian sugar mills want limits on government imports

[NEW DELHI] Indian sugar mills have recommended the government limit the volume of imports if it decides to purchase sweetener from overseas.

ISMA said if the government "wants to import for their own comfort, not more than 400,000 to 500,000 tons of sugar should be allowed to be imported" and priority should be given to domestic mills in the country's west and south to help utilize their capacity better, Indian Sugar Mills Association spokesman Sanjay Banerjee, said by phone. "ISMA has submitted that there is enough sugar and sugar imports are not required." ISMA this week cut its estimate for this season's sugar production 4.7 percent to 20.3 million tons as a cane shortfall prompted mills in Maharashtra and Karnataka to close earlier than usual. That would be the lowest since 2009-10 and compares with the government's estimate of 22.5 million tons. The country has maintained an import duty of 40 percent even as the outlook for shrinking supply boosted domestic prices about 6 percent since the start of December.

ISMA confirmed the contents of a Feb 23 letter to the Food Ministry obtained by Bloomberg that re-iterated there's no need to import sugar and recommending a limit on any purchases if they were to occur. The Food Ministry didn't immediately respond to an email seeking comment.

Unrestricted and uncontrolled imports will burden the sugar industry and farmers in the medium and long term, the South Indian Sugar Mills Associations said in a March 6 presentation to the Food Ministry, a copy of which was obtained by Bloomberg. If required, imports shouldn't exceed 400,000 tons to 500,000 tons and priority should be given to mills in the country's south and west, it said. Two phone calls to the South Indian Sugar Mills Associations weren't answered.

India imported 4.08 million tons of sugar in 2009-10 and exported a combined 5.6 million tons in 2010-11 and 2011-12, according to ISMA data. Imports totaled 774,000 tons even as production exceeded demand in 2012-13 and 2013-14 and exports were 1.6 million tons in 2015-16, the data show.

BLOOMBERG