Tough season ahead for the sugar sector

Thanks to the too much political interference in the sugar sector, India, will soon become a large importer of the sweetener. Ironically, only last year it exported a lot of sugar. From this year onward, the story could be different.
India will turn a big importer after October 2009 as the crop area shrinks and demand rises, a leading producer said on Friday. Thanks to the politicians, farmers don’t find it a viable proposition to grow cane anymore. They are forced to wait for their payments for years at a go. As the sector is largely controlled by the so called public sector, no remedy seems in sight.
The country may have to import up to 4 million tonnes of sugar in the next crop year, starting from October 2009, Sanjay Taparia, finance director at Simbhaoli Sugars Ltd said in an interview.
He said India's imports would have been even higher but the country's choked ports will not be able to handle such a volume.
Sugar output in India, the world's second largest producer after Brazil, is likely to be 26.5 million tonnes this year, down from a record 28.4 million tonne last year. Exports in the current year are likely to be a record 4 million tonne.
Some expect production to fall further to 18-19 million tonne in 2009-10 as deficient rainfall this summer has affected planting in some parts of the country. Taparia said demand in the year that begins in October 2008 will be met from the new crop and stocks of 11 million tonne.
"But in 2009-10, we will have to import for sure," Taparia said.