A healthy sugarcane crop in the country and rising production world-wide has added to the woes of the industry reeling under the pressure of low global prices and rising unsold stock.

The opening stock, which was 54 lakh tonne last year, rose by 11 lakh tonne this year and the industry fears that it would go up to 75 lakh tonne by the end of the current year.

Speaking to The Financial Express, Indian Sugar Mills Association director SL Jain explained how the figure had been arrived at. He said that in the current sugar year production would be around 155.5 lakh tonne as against 120 lakh tonne in the previous year. Demand, which stood at 145 lakh tonne last year, would not exceed 155 lakh tonne this year. If the opening stock of 65 lakh tonne and expected imports of 5 lakh tonne is added to the total production, itwould leave 75 lakh tonne of unsold stock at the end of the year, Jain said.

Jain said that the next government should urgently do something to check imports that have been rising unabated. "Not only is world production increasing, but countries including Brazil have already increased their imports."

Sugar prices are currently below the cost of production of even efficient sugar exporting nations. According to Jain, countries are saving their skins by raising import tariffs and giving export subsidies to get rid of burdensome surpluses. "India is the only country which is offering itself as a major market for foreign sugar."

The ISMA chief said that the association would also ask the new government to deregulate the industry. "Instead of taking 40 per cent of sugar from producers at levy prices, the government should reduce its procurement to not more than 20 per cent." According to Jain, sugar should be provided at subsidised rates only to people living below the poverty line. "It is not fair tosubsidise the rich at the cost of the industry".

Another problem weighing the industry down is the unusual delay in the announcement of levy prices by the government. "It is strange that the government has taken away the entire year's levy quota from the industry and has not yet announced levy prices." The ISMA director Jain said that whatever contradictions are there between various departments of the government should be solved and the industry should be paid for the sugar it has already supplied.