Month: August 2017

Tamil Nadu sugar mills want 600,000 tonnes from mills in Uttar Pradesh for supply in the coming season but want central government help on the transport cost. Sugar output in Tamil Nadu has been declining for some years. With the deficient rain this season for the fourth year in a row, mills in Tamil Nadu are estimating only 550,000 or 650,000 tonnes of output for 2017-18, as against 2.4 million tonnes in 2011-12. In sugar season 2016-17, the state reported output at 1.05 MT, almost equivalent to its annual consumption. The UP mills agreed, but were uncomfortable with the transportation cost of Rs 3-3.5 a kg. Mills in Tamil Nadu cannot take this burden; it would inflate prices in the state. Therefore, seek involvement of Isma.

Prices of sugar remained largely flat across markets barring north India, where prices inched up due to improved demand from north-eastern states. Most of the demand is coming from north-eastern states as markets in the western region were largely shut due to Raksha Bandhan festival and Lunar eclipse, which is considered inauspicious among traders. Government warning of re-imposing stock limits if prices rise further seems to have kept traders cautious and away from aggressive trade.

The government is likely to allow import of 300,000-500,000 tonne sugar at a concessional import duty of 25% to augment supply during the upcoming festival season. The proposal to this effect (allowing import at 25% import duty) might be put up to the Cabinet for approval later this week. Government was planning to tweak the conditions of advance licence scheme giving more time to sugar mills and refineries to fulfil the obligation of re-exports.