Minister K.V. Thomas confirmed that sugar prices have remained stable since April 2013 after deregulation of the sector. Deregulation has given mills the freedom to sell in the open market and no obligation to supply the sweetener at subsidized rates to government ration shops.
Sugar production during 2012-13 sugar season is estimated to be about 24.8 million tonnes as against domestic consumption requirement of about 23 million tonnes. The import duty on import of sugar has been kept at moderate level of 15 per cent, he added. Sugar is currently available in the market at Rs 35-40 per kg in the capital.
India is the world’s second largest producer and biggest consumer of sugar. India’s rupee has tumbled 14% this year. Exports may increase threefold next year as the depressed domestic currency increases demand for sugar exports from the Middle East and Asia. Exports could reach 1 million metric tonnes according to Renuka Sugars with the National Federation of Cooperative Sugar Factories suggesting that exports this season may exceed 300,000 metric tonnes.
Indian exports may simply add to global sugar stocks further depressing global prices. Sugar prices have fallen for three years making the decline the longest since 1992. Global supply in the 2013/14 season commencing October will exceed demand by 4.5 million tonnes.