In a joint press conference in New Delhi, ISMA and NFCSF urged the Centre to remove two big controls on the sector-fixing monthly sale quota and asking mills to contribute sugar for ration shops at subsidised rate
New Delhi: The apex sugar bodies today urged the government to immediately allow normal export of the sweetener saying otherwise sugar mills may not be able to pay the mounting arrears to sugarcane growers, reports PTI.
The government should immediately permit normal export of sugar to prevent mounting sugarcane arrears to farmers as mills are facing losses of about Rs150 per quintal on the sale of sugar, Indian Sugar Mills Association (ISMA) and National Federation of Cooperative Sugar Factories (NFCSF) representatives said here.
In a joint press conference held here, ISMA and NFCSF sought that the Centre should remove two big controls on the sector-fixing monthly sale quota and asking mills to contribute sugar for ration shops at subsidised rate.
Pointing out that sugarcane arrear till December 2010 stood at about Rs4,000 crore, ISMA president Narendra Murkumbi said: "There is surplus of three million tonnes (MT).
We feel there is definitely a ground for allowing export of another two million tonnes as a million tonne has already been shipped under the advance licence scheme (ALS)."
At present, the government has kept on hold export of 0.5 MT of sugar under open general licence (OGL) due to high inflation. But earlier, it had allowed mills to meet their export obligation (ALS) of nearly one million tonnes by March 2011.
The industry has pegged sugar output at 25 MT for the 2010-11 sugar year (October-September), as against demand of 22 MT. Till February, about 16.3 MT of sugar has been produced, against 13.7 MT in the year-ago period.
"Since January, almost all sugar mills have been selling sugar at a price below the cost of production and are incurring a loss of Rs150 per quintal. This is unfortunate since there is an opportunity to export surplus sugar as global prices are high by about Rs 500 per quintal," Mr Murkumbi observed.
In Uttar Pradesh, cost of sugar production is Rs2,950 a quintal, while ex-mill price is Rs2,800 per quintal.
Similarly, in Maharashtra, cost of production is Rs2,750 per quintal, ex-mill price is Rs,2,600 per quintal.
Mr Murkumbai said the export would improve cash flow of mills to make timely payment to the cane farmers. At the same time, he warned that if the government does not allow mills to export sugar, "sugarcane arrears will further mount by the time crushing operation ends in April."
Noting that this is the opportune time to decontrol the sector as prices have plunged by 30% year on year and expected high production, Mr Murkumbi said: "We should get freedom to sell our product, which all other industries enjoy."
Besides, he said that the government should procure sugar from open market for distribution through ration shops instead of buying it at a cheaper rate from sugar mills.
"Sugar industry is the only industry which is made to bear the financial burden of a social welfare programme. As compared to an ex-factory sugar price of Rs2800 a quintal, at present, the levy sugar price offered by the government is only Rs185 per quintal," the ISMA president said.
He urged the government to put the sugar sector at par with other industries in the country.
Chief economic advisor Kaushik Basu said that food inflation, which has attained single digit now, would fall quickly in another two months and added that the November-December (2010) movement was considered temporary
Pune: The downward trend in food inflation which has attained single digit now, would continue and could touch 7%, reports PTI quoting chief economic advisor Kaushik Basu.
"Inflation has come down substantially and I expect it to fall quickly in another two months," he told reporters noting that food inflation figure, which was earlier above 10%, had been reduced to 9.52% now.
"It is not unexpected. What we had anticipated is happening," Mr Basu said adding that the November-December (2010) inflation movement was considered temporary.
By the end of fiscal, the inflation figure could be pegged at 7%, he said.
Mr Basu was here to attend the convocation ceremony at National Institute of Bank Management (NIBM) where he shared dais with the Reserve Bank of India (RBI) governor Mr Subbarao.
Mr Basu also observed that the growth estimate this year at 8.6% would remain "intact".
In his address, Mr Subbarao said translating growth into poverty reduction was important and one of the challenges faced by the banking sector in India was that of "financial inclusion".
"Banks have to increase their efficiency and reach out to remote areas and the poor," he added.
The RBI governor also asked banks to find innovative ways to bear the burden of increased investment in infrastructure sector targeted at $1 trillion in the next five years.
"Much of this burden will fall on the banking sector," he noted.
Persistent weakness in all sectors indicates the possibility of a further downtrend
Implications of the effects of spiralling crude prices on interest rates resulted in profit booking, pulling the markets down this morning. Concerns over the escalating violence in Libya and weak economic news across Asia also put pressure on the market. Trade was range-bound and the indices stayed in the negative zone through the day.
Even a fall in the food inflation figure for the week ended 26th February failed to enthuse investors. Today's dip after impressive gains last week, led 12 of the 13 sectoral indices on the BSE into the red.
The Sensex and the Nifty traded below yesterday's closing figures, tracking weak markets across Asia. The Sensex and the Nifty opened with a negative gap at 18,431 and 5,516, respectively. This was the day's high. Within an hour, the benchmarks hit their intra-day lows of 18,261 and 5,468. The Sensex fell 142 points to 18,328 and the Nifty fell 37 points to 5,494. The advance-decline ratio on the National Stock Exchange was 551:819. The market is still directionless with a strong possibility of breaking down.
The market breadth on the key indices weighed on the losers as the Sensex closed with 21 declining stocks and nine advancing stocks, whereas 30 stocks on the Nifty closed in the red, 19 were in the green and one remained unchanged. Among the broader indices, the BSE Mid-cap index fell 0.07% and the BSE Small-cap index declined 0.25%.
Baring realty, all other sectoral indices on the Bombay Stock Exchange ended lower. BSE Metal (down 1.30%), BSE Bankex (down 1.16%), BSE TECk (down 0.54%), BSE IT and BSE Consumer Durables (down 0.53% each) were the top losers. Outside this overall negative picture, BSE Realty (up 0.67%) was the lone gainer.
The major gainers on the Sensex were ONGC (up 1.62%), DLF (up 1.42%), Wipro (up 0.69%), Reliance Infrastructure (up 0.66%) and Reliance Communications (up 0.45%). The main losers were Tata Power (down 2.91%), Tata Steel (down 2.59%), ICICI Bank (down 1.87%), Hindalco Industries (down 1.72%) and State Bank of India (down 1.63%).
After a gap of nearly three months, food inflation eased to 9.52% for the week ended 26th February, from 10.39% in the previous week. The rate of price rise of food items has fallen to a single-digit figure for the first time since the week ended 4th December 2010, when it was 9.46%.
The decline in food inflation is expected to give the government some breathing space, after being under severe criticism for not controlling inflationary pressure caused by high food and crude oil prices.
Markets in Asia closed with deep cuts on negative economic triggers from across the region, coupled with rising crude prices. China reported a trade deficit of $7.3 billion in February, against expectations of a surplus, which the government attributed to the long holiday period for the Lunar New Year celebrations in February. Also, Japan's gross domestic product fell at an annualised 1.3% in the December quarter, more than the 1.1% contraction reported last month. Also today, the Bank of Korea hiked its benchmark base rate to 3% from 2.75%, for the second time in three months, in a bid to curb rising prices.
Meanwhile, April crude oil futures on the Nymex rose 48 cents to $104.86 per barrel, after settling lower on Wednesday, as violence escalated in Libya and reports mentioned about damage to key oil facilities.
The Shanghai Composite tumbled 1.47%, the Hang Seng declined 0.82%, the Jakarta Composite slid 0.31%, the KLSE Composite fell by 0.44%, the Nikkei 225 tanked 1.46%, the Straits Times slipped 0.56%, the Seoul Composite fell 0.99% and the Taiwan Weighted was 1.22% down in trade today.
Back home, institutional investors, both foreign as well as domestic, were net buyers of equities on Wednesday. Foreign institutional investors pumped in funds worth Rs131.17 crore and domestic institutional investors bought stocks worth Rs112.99 crore.
Tata Steel (down 2.59%) today said that its expenses on key raw materials are likely to go up by $1 billion in the current fiscal to $7 billion, due to a rise in input costs. The costs on inputs would further escalate by around 15% next fiscal, over the 2010-11 levels. This was mainly due to higher iron ore and coking coal prices, which went past $300 a tonne as a result of a global scarcity in the wake of floods in Australia.
Mahindra & Mahindra's (down 0.19%) commuter segment bike Stallio's production fell sharply by 81% in the last three months to just 139 units in February, while sales plummeted to just 46 units during the month on account of problems in the product.
Mahindra Two Wheelers produced 716 units of Stallio in December 2010. However, after problematic parts started pinching the company, the production started to fall. In January, the production of the 110cc entry-level bike came down to 421 units and it further fell to 139 units last month.
Dhunseri Petrochem & Tea (up 0.34%) has acquired the Sona Assam Tea Factory from Sona Assam Tea Company. The capacity of the acquired factory is 7 lakh kg per annum. Dhunseri will expand the factory's capacity to 10 lakh kg per annum during this season.