India can be price maker in sugar, says Atul Chaturvedi

Atul Chaturvedi, executive chairman, Shree Renuka Sugars and president of Solvent Extractors’ Association of India, said the government should raise the fixed minimum support price on sugar as India is in a position where it can set the prices of sugar and the world will have to buy its product as per decided rates, he told Swati Khandelwal of Zee Business in an interview. Edited Excerpts:

What are your expectations for the sugar sector?

The government’s support for sugar in the recent past has helped the industry to reduce the outstanding arrears of farmers in some states like Uttar Pradesh. But there is an aberration related to the fixed minimum selling price (MSP) of Rs 29/kg, and we feel this MSP should be raised to Rs 34-35/kg. As the present MSP is not sufficient to make the industry profitable, which indirectly will have an impact on the farmers, who will not be able to earn profits and will not be able to receive their payments on time. But there is a section in the government which feels that any rise in the MSP will affect exports.  We feel that it is not a wrong assumption as India is a home for world’s surplus sugar and is in a position of being a price maker, not a price taker at present. Thus, the world will have to buy sugar at high prices from India. In fact, it is an opportunity for India and that’s why the MSP should be raised. The second issue is related to the aberration in ethanol, a segment supported by the government. We want it to have a single price, which is a balance of all three current prices. 

Do you think Shree Renuka Sugars will be able to meet or exceed the targets in terms of topline, bottomline and margins for this fiscal? 

There is an improvement in our operations. Our crushing activity has increased 20-25% and the refining activity is in full swing. When it comes to capacity utilisation, the Kandla unit’s capacity is being used at its fullest. I believe this year is going to be a good one for us. Secondly, Shree Renuka Sugars has become a subsidiary of Wilmar. This association helps us by increasing the inflow of international information for us. I feel all these activities will add to our profitability this year. 

Your expectations from the interim Budget this year?

As the president of Solvent Extractors Association of India, I would like to talk about vegetable (edible) oil sector and then move to sugar. The government should create an oilseed development fund that will ensure that there is an increase in oilseed cultivation in India. It should encourage mustard cultivation in the country. And, farmers of Punjab and Haryana should be incentivised to divert themselves from wheat and rice to cultivation of mustard and maize. The exercise will also help in maintaining water table in the two states. It should try to increase the duty differences between crude oil and refined oil Palmolive imports from 5% to 15%.