Sugar production data by food ministry is blemished

Agriculture Minister Sharad Pawar today said there seems to be some mistake in sugar production data released by the Food Ministry and expressed confidence that output is likely to be between 25.5 and 26 million tonnes in the next sugar year, starting October.

Yesterday, Food Minister KV Thomas had said that sugar output is estimated to rise marginally to 24.6 million tonnes in the 2011-12 sugar year (October-September) from 24.3 million tonnes this year. The data was compiled based on the reports of cane commissioners of ten major producing states.

"My impression is that there is some mistake in the calculation. I will collect the proper figure by Monday and then give it to the Food Minister," Pawar told reporters when asked about his views on the latest sugar production data released by the Food Ministry.

"I think production will be between 25.5 and 26 million tonnes. This year, monsoon has been good and reservoir position is also good. So the withdrawal (recovery rate) of sugar from sugarcane will be higher than the current season," he said.

Sugarcane output is pegged at 342.2 million tonnes in the the 2011-12 crop year, as against 339.16 million tonnes in the 2010-11 crop year, ended June.

The sugar production estimate of Pawar, who held the Food Ministry till mid-January this year, is in line with the initial estimate done by the Indian Sugar Mills Association (ISMA), the apex industry body for private mills.

Asked whether the lower output estimate by the Food Ministry would delay exports, Pawar said: "Global prices will become unfavourable if there will be a delay. The government had to provide about Rs 1,500 crore to mills as export assistance a few years ago. We do not want that situation."

Earlier this week, Pawar had said the government should announce the policy for sugar exports by the middle of next month as the country is all set to witness bumper production in the 2011-12 sugar year, starting October.

"We have to allow exports. From October onward, we should announce a policy for sugar exports. A clear-cut message needs to be given to sugar mills about the quantity to be exported during the next six months," Pawar had said.

Thomas had yesterday said exports would be considered after the festival season.

The government has allowed exports of 2.6 million tonnes of the sweetener in the current sugar year, including 1.5 million tonnes in three equal tranches under Open General Licences (OGL). The remaining 1.1 million tonnes was the pending export obligation of the mills under the Advance Licence Scheme (ALS).

India is the world's second-largest sugar producer after Brazil, but is the biggest consumer of the sweetener. The annual demand stands at 21-21.5 million tonnes.

source: BS