UP holds up imports, adds to sugar crisis

At a time every kilo of sugar counts, 9 lakh tonnes of the sweetener are stuck at the Kandla port in Gujarat because Uttar Pradesh won't allow them in.

At a time every kilo of sugar counts, 9 lakh tonnes of the sweetener are stuck at the Kandla port in Gujarat because Uttar Pradesh won't allow them in.

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Worried over dipping stocks, the Union government found this out as it talked to millers on Friday.

Uttar Pradesh, the country's biggest cane-growing state, had in November banned import of raw sugar after farmers protested, saying imports were curbing their bargaining power with millers.

Senior food ministry officers, including joint secretary overseeing sugar, N. Sanyal, and sugar director R.P. Bagadia, went into a huddle with millers to put a figure on the amount contracted for import so far.

If Uttar Pradesh would lift the ban, prices could ease, the millers told the government. The Centre could take it up with the UP government, sources said.

"Imports have slowed down due to high global prices. Holding up of sugar already imported has only worsened the crisis," said G.S.C. Rao, executive director of Simbhaoli Sugars Ltd, one of Uttar Pradesh’s leading mills.

The northern state’s policy is at odds with the national policy of freeing sugar imports by removing duties to boost stocks, following a 44 per cent fall in output due to a drought.

The Congress hinted that the crisis ought to be have been handled better by Agriculture Minister Sharad Pawar. Without naming him, party general secretary Janardan Dwivedi said: “The job of the government and ministers is not only to point out the problem but also to find a solution...”

India is the world’s largest sugar consumer and second largest producer, next only to Brazil. It is back to being a net importer for the first time since the 2005-06, causing global prices to hit a 29-year high.

The agriculture ministry described the situation as “uncomfortable” in a note to the Cabinet Committee on Economic Affairs recently, adding country's closing balance of sugar could end up in the negative of 60,000 tonnes. This means cooling prices could be difficult for the government in the coming months.

(With inputs from Saroj Nagi)