Expect levy sugar quota to be reduced: Rana Sugar

In an interview with CNBC-TV18, Rana Inder Pratap Singh, Managing Director of Rana Sugars, spoke about the latest happenings in his company and sector.

Below is a verbatim transcript of the interview.

Q: What exactly is the situation right now in terms of global prices and where have they stabilized at?

A: Currently, the global prices on raw sugar are approximately at 14 cents a pound and white sugar at approximately USD 470-480. So we landed a price of white sugar in the country approximately Rs 25-26. This is the situation and the landed price for raw is USD 410-420.

Q: There is a meeting apparently on the June 10 to consider import duty on white sugar. What are your expectations there and what do you think the absolute level of duty could be—would be 40%?

A: I think so. This is a period of time where the sugar industry requires import duty on white sugar to sustain in the domestic markets since we have paid a very high price for sugarcane and the expected price of sugar is not what we had expected. The industry requires surely import duty on white sugar and the level could somewhere be between 30-40%. But the higher it is the more beneficial for the industry.

Q: There is also talk that the levy sugar quota could be reduced very soon. Are you expecting any changes in the levy quota or price?

A: Yes, we are positively expecting a decrease in the levy quota because if you see the levy quota which was increased to 20% was increased on the production level of 13.5 and 14 million tons. Since our production has gone upto 18.5 million tons so the need for sugar under the levy quota has already been fulfilled.

As per the requirement it balances around 15 and 16%. So the levy quota should come down.

Q: In that case what kind of average realizations do you think more sugar companies will strike this quarter?

A: This quarter the average realization should be somewhere between Rs 28-29. But once we have the future months, which are coming would be months for high consumption months. So we expect with the duty coming in we should have a better realization.

Q: Just for your company in specific, you had a bit of a kicker because of the expansion you did on the power side. Have you been able to sell any additional amount in merchant?

A: Yes we are consistently selling power under the merchant power purchase agreements and we as well as from Uttar Pradesh as and our Punjab plants we are consistently selling power—40MW is being exported.

source: moneycontrol