This is unfortunate from the industry's point of view as the sugar cycle has not been completed. The particular part of the cycle, which characterises high sugar prices during the year of shortage has given a go by.

Historically the industry makes up for the losses incurred in the other parts of the cycle in this segment of high prices.

For almost a year the threat of imports had kept the sugar prices down all over the country, though the production was estimated to be lower. Even though no exact data is available as to the quantum of sugar that actually entered thecountry, good amount of noises about ships laden with sugar berthing in various ports across the country kept a check on the sugar prices.

The industry which was crying itself hoarse on the faulty government policy of keeping sugar imports under open general license at zero duty, finally managed to convince the BJP government which imposed an import duty of five per cent and a countervailing duty of Rs 850 per bag.

Unfortunately for the industry it was a case of a bad timing. By the time it managed to get the government to impose tariff on imports barriers reports of excess production flooded the market thereby smothering any possible improvement in the prices. The recent depreciation in the value of rupee (which would mean costlier imports) has also had no bearing on the prices.

In fact, the industry itself was surprised by the sharp increase in cane availability. According to industry experts, EL Nino which was responsible for many catastrophes in the form of floods and droughts has made lifemiserable for the industry by increasing the sugarcane yield and at the same time bringing down the average recovery rate by about one per cent.

Heavy unseasonal rains in many parts of the country, attributed to El Nino, increased the vegetative period of the crop delaying the flowering. As an offshoot of this phenomenon, the yield per hectare of the crop increased sharply by two to three tonnes. Indian Sugar Mills Association (ISMA) has revised its earlier sugar output estimates for the 1997-98 sugar season (October-September) to 130 lakh tonnes from 110 lakh tonnes.

The production has already crossed 127 lakh tonnes. With a carry forward stock of 65 lakh tonnes and estimated consumption of 145 lakh tonnes, the industry is expected to close the year with a stock of 50 lakh tonnes. Moreover, with a bumper crop of 160 lakh tonnes next year the country is moving again into an era of sugar surplus and it would not be long before the sugar industry starts lobbying for freely allowing exports, though theirexperience with it has never been all that fruitful.