The way Namo Govt has managed the sugar sector is exemplary. It can be taken as a case study in sectoral management …win win situatiin…keeping both farmers and mill owners happy.
There is a huge increase in sugarcane productiin and also a huge increase in ethanol procurement by the OMCs…and the price at which ethanol is procured is almost at sugar selling price parity.
We are expecting a shortfall in sugar production of just about 1.5 million tons. The govt has already banned sugar exports. A moderate tilt in production of sugar vis a vis production of ethanol will ensure that sugar price remains stable and there is no sugar deficit.
Those who are betting on sugar sector upcycle are basically betting on bungling of this sector by the Central Govt…that too in an election year.
Given the track record of this Govt in handling sugar sector, i do not think that its a good investment betting against the govt. A sugar deficit of just 1.5 million tons is not such a big deal…this govt has effectively tackled sugar deficit of 6 million tons and a sugar surplus of 8 million tons in the last 8 years.
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