Honourable Shri Manmohan Singh je
Prime Minister of India
Subject: Protect Sugarcane Farmers’ Interest: Increase the Import Duty on Raw Sugar
The sugarcane growers in India are quite concerned with the Indian government move to allow import of raw sugar this year, after a gap of two years, even though there is confirmed assessment of surplus sugarcane production in the country in the current season (October 2012- September 2013). We would like to draw your attention on this issue and would demand from you to increase the import duty on sugar from current 10% to at least 60% as soon as possible. We would also demand that the government must bring out notification to immediately stop any further import of raw or refined sugar in 2013.
We have confirmed news that some of the Indian mills (like ED&F Man and Renuka) have signed deals to import 450,000 tonnes of Brazilian raw sugar from October 2012 because of low global price for sugar. It is also well established that whenever India decide to import sugar, it surges the global prices for sugar. India, the world’s No.2 sugar producer after Brazil, last imported the sweetener in 2009/10, sending global prices to 30-year highs.
As per the current projection, the estimated sugar production in 2012-13 is 24 million tonnes. Besides that the year ending stock, as on 30 September 2012, is expected at 6.5 mt. Hence the total domestic sugar stock in the year 2012-13 is expected to be 30.5 million tonnes, which is quite sufficient to meet the domestic requirement of sugar.
Total expected production = 24 MT
Last year opening = 6.5 MT
Total available sugar = 30.5MT
Total expected requirement= 20 MT
Excess stock (expected) = 10.5 MT (FY 2012-13)
The drop in global sugar prices is quite attractive for Indian mills to import cheap sugar. The price difference in the global market is so high that despite calculating processing and handling cost, importer can make a profit of more than $60 per tonne. Besides that, it is also quite lucrative for them to import cheap sugar given the sharp increase in domestic price of sugar which has climbed by around 25% in the past three months to $680 ( Rs 35,938) a tonne, making imports a profitable proposition.
It is expected that the import of sugar would bring down retail prices, which is currently surging between Rs. 40 to 50 per kg, but the previous year experience indicate that the huge duty free imports do not help the consumers at all, except helping the importers, the foreign traders and the bureaucrats/politicians who get their commissions on each order. The entire people of our country are made to suffer so that a few may make fortunes. It is indeed a tragic policy that has resulted in windfall profits for a few at the cost of millions of farmers and crores of consumers. India’s dependence on imports is NOT a solution to the sugar problem—whether shortage or high prices. The only solution must be to promote sugarcane production by investing in agriculture and subsidising the farmer. In this way not only would the farmer and rural economy flourish, the consumer too would get sugar at a reliable price.
We, the Bhaartiya Kissan Union, urge you to please take up this issue seriously. We urge you to increase the import duty on sugar from 10% to 60% to save the interest of domestic sugarcane grower. The sugar cane farmers are already suffering with low farmgate price for sugar with the implementation of fair and remunerative prices (F&R) for sugarcane in 2009 with the amendment in the Government of India’s Sugar (Control) Order of 1966. Due to drought like conditions in UP, the cost of production of sugarcane has almost double and the retail price for refined sugar has more than doubled in last 2 months but there is no corresponding increase in sugarcane prices. The increase in fertilizer prices up to 122% in the last two years has further worsened the situation for sugarcane farmers.
We therefore urge you to please take up this issue in the next Cabinet committee meeting and take a policy decision to increase the import duty on sugar to 60 percent and moreover, impose a ban on import of all kinds of sugar immediately.
We sincerely hope that you would look into this problem and take necessary actions on an urgent basis to protect the interest of millions of sugarcane farmers in the country.
Ch. Yudhvir Singh Rakesh Tikait
General Secretary Spokesperson
Indian Coordination Committee of Farmers’ Movement Bhartiya Kissan Union