New Delhi
13 June 2008
India, the world's second largest sugar producer behind Brazil, may be forced to import the sweetener. Disgruntled sugar farmers are switching to other crops because mills are not able to pay them the mandated price. The industry blames artificially high prices set by state governments as a sop to the powerful voting bloc of 50 million sugar farmers. Details from VOA Correspondent Steve Herman in New Delhi.
Some farmers have taken their appeals for payment to India's Supreme Court which has ruled in their favor. Others, less patient with the legal process, are laying siege to sugar mills.
The director-general of the Indian Sugar Mills Association, S.L. Jain, says the end result is that many farmers are giving up on the cane.
"It created a great negativity against sugar cane," said Jain. "They said 'to hell with this crop.' This is what is happening. Farmers are changing over to other crops."
Another incentive to switch is that with global prices for sugar slumping, other crops look more lucrative.
Jain says India, which used to be the world's largest sugar producer and the biggest consumer of the sweetener, has not had to import sugar since 2005.
"Production is going to drop very steeply in the coming year. And, also, in the following year, thereafter we may have to go for sizable imports of raw sugar as we did in the past," said Jain.
India's annual domestic demand is estimated at 23 million metric tons. Current output is about 3.5 million tons above that. But the sugar mills association predicts with the exodus from cane farming output will drop to as low as 17 million tons in a couple of years.
Research analyst Amol Tilak at Kotak Commodities in Mumbai cautions, however, it is premature to forecast a need for India to import sugar.
"We find that the production of sugar as a whole, it's still quite large enough to cater to the consumption demand," said Tilak.
What is certain is that for many farmers and millers, sugar is becoming a bitter crop in a land where cane has been cultivated for thousands of years.