Energy crisis jacks up prices, creates supply problems
Import of raw sugar began in 2003-04 to meet domestic demand. To facilitate import, the Centre relaxed certain stipulations. But Indian mills, which imported around two MTs of raw sugar in 2004-05 duty-free, still need to export an equivalent quantity of white sugar till September 2007. India is expected to sell about 200,000 tonnes of white sugar to Pakistan anytime before September 2006, says a senior official at Indian sugar mills association.
In the wake of the unprecedented increase in global sugar prices, an export initiative from India was inescapable despite its own shortages. Prices have already increased by 11.2 per cent this year, according to a finance ministry report. Spot prices have shown a sudden spurt in Maharashtra and Gujarat in the last week of November due to increased buying and low stocks. Reports claim medium grade sugar is trading at Rs 1,882-1,955 per quintal (100 kg), while small grade sugar is trading at Rs 1,830-1,861. Sugar prices may cross Rs 2,000, if stocks go down further.
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