Thursday, November 09, 2006

sweetness to come back in sugar sector

Food and Agriculture Minister Sharad Pawar today indicated that a decision on lifting the ban on sugar export would be taken in the next two weeks.

“We are seriously considering lifting the sugar export ban in the next two weeks as availability of sugar is not a concern now,” Pawar said.

He also announced slashing of interest rates on loans disbursed from the Sugarcane Development Fund (SDF) as well as on those advanced by banks to cooperative sugar mills covered under the credit restructuring package.

“Since a substantial quantity of sugar would be available in the next season, the ban on export would have to be lifted and a decision would be taken at the appropriate time,” he said at the Economic Editors’ Conference here today. The sugar output this year was expected to rise to around 22.7 million tonnes from last season’s 19 million tonnes.
The area under the sugarcane crop had gone up this year because farmers got the highest-ever prices for their cane last year.
“Though this year they may not get that kind of returns, their realisation will not be below Rs 100 to Rs 120 a quintal,” Pawar said and added that the cane yield was likely to be good this year because of favourable weather conditions.
The minister announced that the rate of interest on all outstanding SDF loans and fresh loans disbursed on or after October 21, 2004, had been reduced to 4 per cent a year (simple interest).
Besides, the normative project cost for SDF funds had also been revised for projects for bagasse-based co-generation of power from Rs 265 lakh per mega watt to Rs 293 lakh for boiler pressure up to 70 per cent atmosphere (1.03 per kg sq cm) and to Rs 363 lakh per MW for over 70 per cent atmosphere.

The SDF loan component had been stepped up from the earlier 30 per cent of co-generation project costs to 40 per cent, he said.For the cooperative sugar mills whose loans had been restructured, Pawar announced a reduction in the rate of interest charged by banks from around 14 per cent a year to 10 per cent. The Centre would reimburse about Rs 560 crore to the concerned banks for this purpose.He claimed that measures taken by the government had helped revive the sugar industry which, in turn, had facilitated timely payment of cane prices to farmers.In 2005-06, about Rs 19,667 crore had been paid by sugar mills as cane prices to farmers. The outstanding payments came to just Rs 177 crore, amounting to below 1 per cent of the total cane price payable during the season.

The recent rollout of the ethanol blending programme by the government should further strengthen the sugar industry, Pawar maintained.India plans to introduce the mandatory blending of 10 per cent ethanol into gasoline across the entire country from June 2007, Petroleum Secretary M S Srinivasan said on Wednesday.

He said the use of 5 per cent ethanol mixed petrol, currently used in three states, is expected to be spread to rest of the country by Nov 15. We have already tied up 50 per cent of the 560 million tonnes of ethanol needed for 5 per cent mixing at Rs 21.50 a litre," Srinivasan said.

India will need 1.12 billion litres of ethanol a year for the move to 10 per cent blended petrol.

"We expect substantial availability of ethanol for 10 per cent blending as new capacities are being created and we are expecting a bumper crop of sugarcane," he said Agriculture Minister, Sharad Pawar, said on Wednesday that sugar production in the cane crushing season that began in October was likely to reach 22.7 million tonnes, up from 19 million tonnes in the year ago period.
Faced with the surge in production a ban on sugar exports may be lifted within the next two weeks, Pawar said.

India also plans to replace around 5 per cent of its current 40 million tonnes of annual diesel consumption with jatropha biodiesel within about five years, as it tries to limit oil imports that account for 70 per cent of its needs
source:- financial express & business standard


Anonymous said...

What about the pricing of Sugarcane ??? Can sugar companies show robust profits in wake of demand of the farmers for whopping increase of 100% in MSP ???

Maharashtra sugar industry is already threatened by agitation by farmers & state may not be able to achieve its target output of 70 lakh tonne sugar at the end of the season.

Because of the agitation lead by Sharad Joshi & independent MLA Raju Shetty, only 54 of the state's total 154 sugar factories have been able to start their crushing season so far which used to start in 2nd week of Oct.

This year, Maharashtra had a bumper sugar crop – of almost 670 lakh tonne – indicating 150 % surge over 445 lakh tonne clocked last year.

If crushing is not started in another 10 days because of the agitation, the crushing season will extend till May, and this means a reduction in recoveries and losses to both farmers and sugar co-operatives.

The state government announced to have fixed Rs 850 a tonne as minimum support price (MSP), but farmers did not accept it &, launched agitation demanding the MSP to be settled between Rs 1,800 and Rs 2,000.

Majority of the factories in Kolhapur, Sangli and Satara could not begin their crushing season yet owing to the strong protest launched there. So far, only 13 of the 41 factories in these three districts have been able to start their operations.

These districts together are considered the sugar bowl of Maharashtra as their recovery percentage often exceeds 12 per cent, while the average recovery for the entire state is between 11 and 12 per cent.

Worst fear is that other states cannot remain insulated from this agitation.

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