Indian sugar industry is hoping for a partial decontrol since a long period of time. Sources indicate that the Food Ministry has referred sugar deregulation to C Rangarajan and a partial decontrol of sugar could be.....
Indian sugar industry is hoping for a partial decontrol since a long period of time. Sources indicate that the Food Ministry has referred sugar deregulation to C Rangarajan and a partial decontrol of sugar could be expected soon. CNBC-TV18 also learns that the levy on sugar and release order could be done away with.
Vivek Saraogi, managing director of Balrampur Chini Mills, in an interview to CNBC-TV18, gave his views on how the sugar sector will perform going forward.
Excerpts from Markets Midday on CNBC-TV18 Watch the full show »
Saraogi expect government to do away with release mechanisms and mill levy. “India’s sugar production for SY12 will be at 26.5 million tonne,” adds Sarogi.
Below is the edited transcript of the interview. Also watch the accompanying video.
Q: There is some talk of a partial sugar decontrol, what could be the nature of any first steps on decontrol?
A: The first step should be abolition of levy or rather levy not being taken from the mills. A levy can also being run by the government. It should now do away with release mechanisms.
Q: Some of these steps have been suggested. This process of decontrol may move faster-than-expected. How soon will it happen?
A: Technically, the sugar year comes to an end in September and October is when the new year begins for sugar. So, any reform or a policy for the industry should be effective from about that period. Crushing begins in mid-November, so any policy change should usually come before that.
Q: A Morgan Stanley report is talking about raw sugar prices of 22 cents next year and 19 cents in 2013. Do you agree with those kinds of forecasts given global demand supply and what influence could that have on local prices?
A: I don’t feel that this 25 cent range can get violated significantly. This is the base range, which should be able to hold out. At these prices, Indian exports would continue to be quite viable.
Q: What is your estimate of the next season’s demand-supply scenario in India?
A: We have given an estimate of 26.5 million tonne from Sugar Mills Association. The demand should be around 23 million tonne, so, with the opening stock, we have clearly displayed a surplus of 4 million tonne.
Q: People are concerned on the fact that the production supply issue looks quite mismatched this year and there is probably a glut that sugar companies will be dealing with. Would you say that is a valid concern or would you take that call only post the festive season?
A: It’s very clear that the policy decision on the export would come from the beginning for this year. I don’t think the tranche would be half million. The minimum tranche should not be less than two million. So, this partial decontrol move should be very positive as we move ahead.
Q: What do you think could be the increase in cane prices given that UP is headed towards elections?
A: It would be very difficult for me to answer that.
Q: What do you think?
A: History tells you that every government, who has raised cane prices, has never won on basis of cane price. However, the government may take up this issue this time.
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more infoVivek Saraogi, managing director of Balrampur Chini Mills, in an interview to CNBC-TV18, gave his views on how the sugar sector will perform going forward.
Excerpts from Markets Midday on CNBC-TV18 Watch the full show »
Saraogi expect government to do away with release mechanisms and mill levy. “India’s sugar production for SY12 will be at 26.5 million tonne,” adds Sarogi.
Below is the edited transcript of the interview. Also watch the accompanying video.
Q: There is some talk of a partial sugar decontrol, what could be the nature of any first steps on decontrol?
A: The first step should be abolition of levy or rather levy not being taken from the mills. A levy can also being run by the government. It should now do away with release mechanisms.
Q: Some of these steps have been suggested. This process of decontrol may move faster-than-expected. How soon will it happen?
A: Technically, the sugar year comes to an end in September and October is when the new year begins for sugar. So, any reform or a policy for the industry should be effective from about that period. Crushing begins in mid-November, so any policy change should usually come before that.
Q: A Morgan Stanley report is talking about raw sugar prices of 22 cents next year and 19 cents in 2013. Do you agree with those kinds of forecasts given global demand supply and what influence could that have on local prices?
A: I don’t feel that this 25 cent range can get violated significantly. This is the base range, which should be able to hold out. At these prices, Indian exports would continue to be quite viable.
Q: What is your estimate of the next season’s demand-supply scenario in India?
A: We have given an estimate of 26.5 million tonne from Sugar Mills Association. The demand should be around 23 million tonne, so, with the opening stock, we have clearly displayed a surplus of 4 million tonne.
Q: People are concerned on the fact that the production supply issue looks quite mismatched this year and there is probably a glut that sugar companies will be dealing with. Would you say that is a valid concern or would you take that call only post the festive season?
A: It’s very clear that the policy decision on the export would come from the beginning for this year. I don’t think the tranche would be half million. The minimum tranche should not be less than two million. So, this partial decontrol move should be very positive as we move ahead.
Q: What do you think could be the increase in cane prices given that UP is headed towards elections?
A: It would be very difficult for me to answer that.
Q: What do you think?
A: History tells you that every government, who has raised cane prices, has never won on basis of cane price. However, the government may take up this issue this time.
....