But satellite mapping at no stage will give an insight into sugar recovery when cane comes to factories for crushing. Finalisation of crop estimate at any stage by ISMA is, as a matter of rule, preceded by consultation with its members spread across the country.
The exercise is claimed to be conducted in a way that leaves no room for guesswork. This is how it should be because forecasts by ISMA and National Federation of Cooperative Sugar Factories (NFCSF) are taken as important inputs by the government to decide whether exports or imports are warranted at a given point.
A controversy was simmering in ISMA virtually from the beginning of the 2016-17 season as to whether imports were needed and if so at what time and by how much.
In an open letter to ISMA President T Sarita Reddy, Shree Renuka Sugars Managing Director Narendra Murkumbi wrote: “A failure to acknowledge the reality... would lead to justifiable doubts as to our intention in suppressing production numbers... We would stand accused of deliberately overstating production numbers in order to avoid timely and essential imports of sugar.”
What provoked Murkumbi to shoot off this candid letter on January 24 was his understanding that ISMA had till that point “overestimated” 2016-17 sugar output by “3 million tonnes (mt).”
Sugar millers in Maharashtra remain a victim of two consecutive years of drought that hit plantation as well as sugar recovery. Production of the sweetener in the western state this season is down to 4.2 mt from 8.424 mt in 2015-16.
Not only ISMA, but also NFCSF and the government had progressively lowered sugar output estimates based on feedback from sugar producing states. ISMA, which ahead of the start of current season placed its bet on sugar production of 23.4 mt, scaled it down first to 21.3 mt on January 25 and now to 20.3 mt.
What is a cause of concern is the surfacing of fissures in ISMA which has over the decades remained one of the country’s strongest industry associations. “It will be foolhardy to deny that differences among members on sugar imports are not sharp. On the one hand, you have groups with refineries wanting imports of raw sugar to start straightway and on the other the majority of mills say imports, if there are any, must not destabilise the local market. A situation of factories defaulting on payment for cane supplies must not recur,” says a senior ISMA committee member.
Ideally, in any industry body, committee members are expected to air their views however contentious they might be but they ensure at the same time that these do not become public. At a recent ISMA meeting, Reddy was constrained to say: “I request every committee member to act responsibly once they step out of committee meetings and not create speculation and uncertainty. I request each one of you to follow a code of conduct and once decisions are made jointly, we should stick to that. Anyone in defiance of this will be working against the common cause of the association.”
A Kolkata-based industrialist who does not want to be quoted says: “The fall from grace of the once-powerful Indian Jute Mills Association through the 1970s and 1980s was not the least due to some members independently lobbying the government for policy changes that would only benefit them. Hopefully, ISMA members will not be found wanting in realising the graveness of breaking the organisational discipline either by way of seeking relief for a section of the industry or by airing their views in public.”
Meeting the shortfall
The ISMA controversy that brewed over imports earlier this season is finally settled. Now that it is agreed that sugar production could be the lowest in six years at 20.3 mt, ISMA has told the government that it could sanction imports of up to 500,000 tonnes. Factories in southern and western India, according to ISMA, should be given priority in imports since cane scarcity restricted the use of their milling capacity to barely 40 per cent this season.
Import decisions should ideally be taken in May or June by when there will be a “clearer picture of sugar production and availability.”
“Shortages, if any, will be restricted to the south and west and, therefore, import arrivals should be in ports there. Enjoying twin advantages of plentiful supply of cane and high rates of sugar recovery, Uttar Pradesh is set to end this season with production of 8.5 mt against 6.84 mt in 2015-16. The other northern states such as Uttarakhand, Punjab and Haryana are also producing more, making the region sugar surplus. Therefore, at no stage imported sugar should find its way into the north and east,” says ISMA past president Om Dhanuka.
Industry officials argue that even while the season beginning October 2017 will open with modest stocks, worth two months’ consumption, the country will have security of supply all through since 2017-18 cane crushing will start early. November onwards, new sugar will be in the market in growing quantities. Though too early to make an estimate of the 2017-18 sugar production, the guess at this point, based on land coverage and plant shape, is between 25 mt and 25.5 mt.
In the meantime, a hardly noticed revolution is sweeping the villages of Uttar Pradesh where farmers are planting high-yielding early variety of Co 0238 cane on a very large scale. Developed at the Coimbatore Sugarcane Breeding Institute of the Indian Council of Agricultural Research, this wonder variety gives a significant lift to sugar recovery. What a boon then it is for the state’s over 2.5 million growers and nearly 120 sugar factories.