New Delhi, August 8:
Suicides by bankrupt Indian sugarcane farmers might well become a thing of the past if the current rise in the global price of sugar continues, making mills scramble for more raw stock.
The recent victory of the Global Alliance for Sugar Trade Reform and Liberalisation in the World Trade Organisation (WTO), which forced the European Union (EU) to end a subsidy regime for beet-sugar that was keeping prices of raw sugar at levels lower than production costs in many countries, is expected to help major sugar producers like India, Brazil and Thailand. â€œThis year farmers can expect a good price as economics justifies it. Mill owners will have to continue to scramble for sugarcane and pay immediately for raw stocks,â€ said S L Jain, director general of Indian Sugar Mills Association. Over the past couple of years, a slump
in global sugar prices and rise in government fixed sugarcane price in India had created a situation that saw farmers not being paid on time by mill owners, and arrears of payments ran into millions of rupees.
The upturn in global raw sugar prices to four-year high levels of $220 a tonne and refined sugar to $370 a tonne is expected to help India, one of the founding members of the global
alliance. â€œWe are happy at the way the global price is going. Raw sugar price has touched a six-year high of 10-11 cents a pound, which can provide profit for efficient producers. Two years back, the prices were at levels of six cents a pound,â€ said Keith De Lacy, chairman of Global Sugar Alliance. â€œThe outlook is the strongest in five years due to the balance between production and consumption and focus on production of ethanol (bio-fuel).
This is reflected in the price,â€ Lacy said. On a visit to study ethanol potential in India, several other alliance members echoed optimism about a further rise in global prices of raw and refined sugar, with demand still in excess of the production. â€œThe present scenario will not only help about 50 million sugarcane farmers in the country but enable India to become a regular exporter,â€ said Jain, who expects the global price of refined sugar to range between $350 and $400 a tonne. With expectation of a bumper sugarcane crop this year despite some losses due to floods, Indian industry is optimistic about achieving a target for sugar production
of over 18 million tonnes. One of the largest producers and consumers of sugar, India hopes to begin the sugar year in October with a carry forward stock of about 4.5 million tonnes.
Encouraged by the success over the EU subsidy issue, the global alliance is now gearing up to lock horns with the US and Japan on high import duties to protect their domestic markets.
Some trade distorting issues are being taken up in WTO negotiations with the global alliance planning to hold a parallel meet on the sidelines of the WTO ministerial meet in Hong Kong in December.