Bitter sweet: government importing sugar at record prices

Thanks to a poor monsoon, and perhaps messy government policies, India is going for heavy sugar imports just at a time when international prices are at a 28-year high, with Brazil, the world's largest sugar producer, also reporting a poor cane crop this year.

Agriculture minister Sharad Pawar told a press conference in New Delhi on Tuesday that sugar yields from India's cane crop may fall because of the failed monsoon. "We will be starting the next sugar season from 1 October with a much smaller opening balance in comparison to the previous year," he said.

Pawar did not give precise numbers, but last week, the head of the National Federation of Cooperative Sugar Factories Ltd, J B Patel, said India's opening stocks would be at 2.7 million tonnes, down three-quarters from 10 million tonnes on 1 October 2008.

But Pawar tried to remain optimistic. ''It is expected that teps taken by government would supplement the country's availability of sugar during 2009-2010 as well as control the prices within reasonable limit,'' he said.

Pawar said the country needed to raise the productivity of its cane crop to improve the situation. "The solution is to increase cane productivity. We cannot have more area under cultivation," he said.

"The country is passing through a difficult situation due to insufficient monsoon. This has not only affected sowing of important crops like paddy but may also adversely impact sugar recovery," Pawar said.