Spotlight

New Delhi, 14 November 2007

GLUT OF SUGAR IN STORE

NEW DELHI, March 15 (INFA): India is happily placed on the sugar front. With the production estimated at around 230-240 lakh tonnes in the 2006-07 season, the sugar industry may soon be facing a glut of the sweetener in the market.

The Union Government has not fixed any target for export of sugar during 2006-07 season. However, it is estimated that about 15 lakh tonnes would get exported in this season, according to the Agriculture and Food Minister, Sharad Pawar.

With the opening stock at the start of season in October 2006 at 40 lakh tonnes, the surplus sugar is expected to be at over 70 lakh tonnes as the country’s annual demand is pegged at only 190 lakh tonnes.

Besides, export, the Government is also considering a proposal to start buffer stock of sugar on the lines of foodgrains procured by Government. The buyers in foreign markets are showing interest at $300-305 per tonne while the sellers are asking for $310-315 per tonne.

On the feasibility at ports, the Mumbai port, which handles the maximum volume of the country’s sugar export, is equipped to manage a maximum of 75,000 tonne in a month.

The Government released 13.77 lakh tonnes of sugar for April, 2007. Out of this 12.00 lakh tonnes have been released in free sale and 1.77 lakh tonnes in levy.

Meanwhile, in a move to help farmers and sugar producers amid expectation of bumper production, the Government is understood to have decided to give major incentives for export while creating a buffer stock of 20 lakh tonnes of the price-sensitive commodity.

Considering a number of proposals, the Cabinet Committee on Economic Affairs, chaired by Prime Minister Manmohan Singh decided to lift the ceiling on sugar exports and provide subsidies to sugar mills for export.

The buffer stock of 20 lakh tonnes of sugar would be created for a maximum of two years, but no official communication could be obtained on the decisions. Export subsidy at the rate of Rs.1,350 per tonne would be given for the sugar mills in coastal areas.

The Tamil Nadu farmers have in the meanwhile demanded the minimum support price (MSP) and the State advised price (SAP) for sugarcane to be linked to the recovery of sugar and the price of allied products like molasses, ethanol and the co-generated power.

They said the SAP of Rs.1,025 tonne was not equal to the actual cost of production. Even Rs.1,200 would not be sufficient. Only linking of sugarcane price to all by-products and ‘peak recovery’, instead of the ‘average recovery’, would enable them to get a remunerative price.

The farmers, overburdened by the rising input and labour cost, are looking for increased prices to make cultivation viable and sustainable. ---INFA

Spotlight

New Delhi, 12 May 2007

MASSIVE GROWTH OF INDIA’S SUGAR INDUSTRY

NEW DELHI, May 13 (INFA): India’s sugar industry looks “quite aggressive”, thanks to the recent large investments exceeding Rs.10,000 crore in the last two-three years, according to the Indian Sugar Mills Association. In the past when the industry was operating under rigid controls, it was invariably criticized for lack of investments.

With gradual relaxation of controls by the Government and incentivisation of investments by few State Governments, entrepreneurs took a leap forward and made large-scale investments in recent years. Thus, large additional capacities have been created in the past 2-3 years, adding up to almost 30 lakh tonnes of sugar production on an annual basis.

Similarly, the capacity for co-generation of power by sugar mills and for production of ethanol has also increased appreciably to about 2000 MW (including the projects under implementation) and 1300 million litres.

The comfortable demand-supply situation prevailing last year, induced the sugar mills to pay much higher prices for sugarcane; in some cases under compulsion by the respective State Governments and in a few others even these levels were exceeded by aggressive millers in trying to increase sugarcane supplies from the areas of other neighbouring units.

Not only the cane price was increased, its disbursement was also made promptly as the going was good and the industry had the requisite wherewithal therefore.  Sugarcane farmers thus took to cane cultivation aggressively. In a single year, the cane acreage increased by two lakh hectares.

Although a firm estimate of cane acreage the year 2006-07 is still not available, it is generally felt that in the final reckoning, the area under sugarcane may be even higher than the current estimate. In the present circumstances, to bring about a balance between demand and supply situation, not only this year but even in the foreseeable future, it would be extremely important to accelerate the pace of sugar exports.

The Ministry of Agriculture and Food promptly moved its proposal for consideration at the highest level of the Government to provide requisite Governmental support for creation of buffer stock of sugar, apart from subsidization of transportation, fobbing and shipment cost (partially) on sugar exports as allowed to developing economies under the WTO rules and practiced in the past.

The scheme proposed by the Food Ministry has reportedly been more or less taken by the Government but no relief measures could be notified having regard to the fact that in a sugarcane and sugar producing State of U.P., Assembly elections were to be held.

Larger use of ethanol, appears to be one of the options to reduce the imbalance in the sugar situation. Presently, at the behest of the Government of India, the Ministry of Petroleum and Natural Gas already announced nationwide doping programme of ethanol at 5% with petrol, some months back.

A lengthy tender procedure was followed to determine the price for supply of ethanol. So far, however, this scheme has covered only ten States against 19 States where the doping was planned.

The States where doping has not begun are those where either there is a problem of levy of import duty on ethanol and/or complete lack of interest by the concerned States. So much so that they have even refrained from notifying their agreement to doping of ethanol with petrol to be served within the respective States. ----INFA

Spotlight

New Delhi, 11 May 2007

MASSIVE GROWTH OF INDIA’S SUGAR INDUSTRY

NEW DELHI, May 12 (INFA): India’s sugar industry looks to be “quite aggressive” thanks to the recent large investments exceeding Rs.10,000 crore in the last two-three years, according to the Indian Sugar Mills Association.

In the past when the industry was operating under rigid controls, it was invariably criticized for lack of investments.

With gradual relaxation of controls by the Government and incentivisation of investments by few State Governments, entrepreneurs took a leap forward and made large-scale investments in recent years. Thus, large additional capacities have been created in the past 2-3 years, adding up to almost 30 lakh tonnes of sugar production on an annual basis.

Similarly, the capacity for co-generation of power by sugar mills and for production of ethanol has also increased appreciably to about 2000 MW (including the projects under implementation) and 1300 million litres.

The comfortable demand-supply situation prevailing last year, induced the sugar mills to pay much higher prices for sugarcane; in some cases under compulsion by the respective State Governments and in a few others even these levels were exceeded by aggressive millers in trying to increase sugarcane supplies from the areas of other neighbouring units.

Not only the cane price was increased, its disbursement was also made promptly as the going was good and the industry had the requisite wherewithal therefore.  Sugarcane farmers thus took to cane cultivation aggressively. In a single year, the cane acreage increased by two lakh hectares.

Although a firm estimate of cane acreage the year 2006-07 is still not available, it is generally felt that in the final reckoning, the area under sugarcane may be even higher than the current estimate. In the present circumstances, to bring about a balance between demand and supply situation, not only this year but even in the foreseeable future, it would be extremely important to accelerate the pace of sugar exports.

The Ministry of Agriculture and Food promptly moved its proposal for consideration at the highest level of the Government to provide requisite Governmental support for creation of buffer stock of sugar, apart from subsidization of transportation, fobbing and shipment cost (partially) on sugar exports as allowed to developing economies under the WTO rules and practiced in the past.

The scheme proposed by the Food Ministry has reportedly been more or less taken by the Government but no relief measures could be notified having regard to the fact that in a sugarcane and sugar producing State of U.P., Assembly Elections were to be held.

Larger use of ethanol, appears to be one of the options to reduce the imbalance in the sugar situation. Presently, at the behest of the Government of India, the Ministry of Petroleum and Natural Gas already announced nationwide doping programme of ethanol at 5% with petrol, some months back.

A lengthy tender procedure was followed to determine the price for supply of ethanol. So far, however, this scheme has covered only ten States against 19 States where the doping was planned.

The petroleum industry and the sugar industry have been continuously pursuing this matter with the concerned State Governments, but without much favourable outcome so far. Efforts to cover these States continue.

Based on 5% doping on a countrywide basis, the total requirement was assessed at 550 million litres.  However, looking to the scenario as aforesaid, the total annual demand may not exceeded say 300 million litres. Sugar industry, specially those units which have set up distillation and ethanol plants in anticipation of the full implementation of the scheme of 5% doping of ethanol with petrol, have suffered. Their only fault being again an aggressive investments to put up the desired distillation and ethanol production capacity.

While a permanent solution lies in persuading the concerned errants States to fall in line, there can be yet another simpler approach.  The Automotive Research Association of India, Pune have after protracted research and experimentation came to the conclusion that upto 5 o 10%  ethanol blended fuel can be used without any alteration in the composition of four wheeler vehicles including fuel injection system. Even the automobile manufacturers in India have come to the same conclusion earlier.  Clearly, 10% blend of ethanol is a viable option subject, of course to availability of corresponding quantity of ethanol. ----INFA

Spotlight

New Delhi, 8 May 2007

SATELLITES ON SOLAR POWER

NEW DELHI, May 9 (INFA): India’s power scenario could indeed witness a revolution in solar power generation if an ambitious programme involving solar satellites developed and tested by the National Aeronautical and Space Administration (NASA), the US, becomes a reality.

These satellites located 22,000 miles up in space, are made up of sheets of small solar cells which capture the Sun’s rays and send them to earth in the form of microwave signals.

These signals are then converted into electricity. The advantage of placing solar collectors in space is that they would receive an unobstructed view of the Sun, unaffected by the day and night cycles, weather, or seasons.

The US-based Space Island Group Inc, is all set to begin delivering this clean and safe mode of electricity to India from 2012 onwards.

Apart from the power benefits that India would receive, the Space Island Group is also planning to set up a manufacturing hub in India for building the receiving antennae and solar satellite components.

This is intended to be done with support from the World Bank, which has expressed keen interest in the project. The cost of launching the satellite in space would be entirely borne by Space Island Group Inc.

The company would also try to involve Central ministries and institutions like the Rural Electrification Corporation (REC) as partners in the project. The partnership requires no financial investment but only an expression of intent of the country to purchase electricity.

The power purchase agreement would involve buying the energy for a fixed price of the US 10 cents of per kWh from 2012 to 2025, with no inflation or other escalation. The company is also planning to tie up with private firms on the same terms. ---INFA

RADIATION TECHNOLOGY SOON

HYDERABAD, May 9 (INFA): If used irrationally, it could cause the effect of a Neutron bomb. If used in controlled environs; it has the ability to cure cancer. The same technology is the need for processing fruits and other agro-products to enhance their shelf-lite.

The radiation process using cobalt istope will become available in Andhra Pradesh market by mid-May.

The technology which is already in use in six locations in India, is being tried out in Andhra Pradesh by Gama Agro-Medical processing jointly with the Bhabha Atomic Research Centre. The technique called irradiation can be used for sterlisation and disintestation. ---INFA