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Sugar alliance to pitch for free trade at Doha

Lola Nayar, in New Delhi

India will be part of a global sugar alliance pitching for free market access and reduction of subsidy by developed countries during the World Trade Organisation meet at Doha this month.

The Indian sugar sector is part of the Global Alliance for Sugar Trade Reforms, which is planning to hold parleys in the Qatari capital Thursday and Friday on the fringes of the fourth WTO ministerial meeting from November 9-13.

The alliance, comprising 16 countries including Brazil, Australia, Thailand and South Africa, was set up two years ago during the WTO talks in Seattle, US.

The GASTR "will take up the issue of heavy domestic and export subsidies provided by developed countries and denial of free market access to developing countries. We hope to gradually make a dent in the system through networking," S L Jain, director-general of the Indian Sugar Mills Association, told IANS.

The incoming director-general of WTO, Supachai Panitchpakdi, will address the alliance meet Thursday.

The alliance will also discuss expansion of tariff rate quota arrangement by developed countries to allow entry of sugar from developing countries.

The sugar sector has been aggressively lobbying in the US and the EU over the last few months for greater market access and a cut in domestic and export subsidies by the developed countries.

"India is among the privileged countries to have been granted quota for export of 20,000 tonnes sugar to the EU and 9,000 tonnes to the US," said Jain.

The sugar export outlook for India is not very bright with international prices not too attractive and with Brazil, the largest sugarcane producer, planning to step up sugar production instead of alcohol as is the case when crude oil prices are high.

Brazil uses a considerable amount of sugarcane for production of ethanol for blending in petrol for vehicle fuel whenever crude prices go up. But when global sugar prices are more attractive, Brazil shifts focus to sugar production.

From a high of $240 per tonne, sugar prices slid Monday to $236 per tonne for white sugar.

"The world scene is not very optimistic. We will have to fight for survival," said Jain, who will be accompanied by an official of the National Federation of Co-operative Sugar Factories to Doha.

The Indian sugar industry, which was exploring the global market with a view to push up raw sugar exports, has decided to keep its plans on hold following reports that European sugar production this year is likely to be lower.

"With EU pushing less white sugar in the global market, there is technically going to be more demand for white sugar, which will fetch better returns," said Jain.

In the last two months, Indian sugar has found good demand, taking exports up to September to 1.2 million tonnes. This year too, despite the expected competition from Brazil, India is hopeful of maintaining the export level.

The largest consumer and producer of sugar in the world, India's sugarcane production cost is second only to Brazil, the world's single largest exporter.

However, due to the high minimum support price paid for farmers for sugarcane, Indian sugar is not able to compete favourably in the global market, allege traders.

Indian sugar production is expected to be lower this year (October-September) at 17.5 million tonnes compared to 18.5 million tonnes last year.

Indo-Asian News Service

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