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Domestic Sugar Prices Mostly Steady Amid Limited Trade

18 Jul 2019 6:47 pm
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NEW DELHI (Commoditiescontrol) - Sugar prices remained mostly steady at the major Mumbai market on Thursday amid limited trading activities.

However, a decline of Rs 4 from the lower was seen in small-grade sugar prices.

In Mumbai, prices were at Rs 3,182-3,232 a quintal for S-grade and at Rs 3,202-3,316 for M-grade, as per Bombay Sugar Merchants Association.

Sugar prices are expected to rise in the next season, which starts in October, as experts believe there will be a deficit in the global markets of around 4 million tonnes, mainly due to a drop in production from India, Thailand and European Union, said Abinash Verma, Indian Sugar Mills Association.

"If there is a deficit in the global market of 4 million from a surplus of 2 million in the current season there is a reason to believe that the global prices should move up from whatever it is today,” he added.

Meanwhile, Brazil has sought establishment of a dispute panel under the aegis of the World Trade Organization (WTO) in a case against India's sugar subsidies to farmers.

In February, Brazil and several other countries including Australia and Guatemala have dragged India into the WTO's dispute settlement mechanism alleging that New Delhi's sugar subsidies to farmers are inconsistent with global trade rules.

Brazil is the largest producer and exporter of sugar in the world.

"Brazil respectfully requests that the dispute settlement body establish a panel," according to a communication submitted by the South American country to the Geneva-based WTO.

Brazil has alleged that in recent years, India has massively increased the level of domestic support under its support regime for sugarcane and sugar.

For example, India has almost doubled the fair and remunerative price for sugarcane from Rs 1,391.2 per tonne in 2010-11 to Rs 2,750 per tonne in 2018-19, it has stated.

That fair and remunerative price is the minimum price that, under Indian law, domestic sugar mills must pay sugarcane producers. It constitutes one of India's most important support measures for sugarcane producers.

In addition, Brazil said some of India's states provide for higher minimum prices for sugarcane that local sugar mills must pay local sugarcane producers.

Seeking consultation is the first step of dispute settlement process. If the two nations are not able to reach a mutually agreed solution through consultation, complainant requests for a WTO dispute settlement panel to review the matter.

They had filed dispute under certain articles of WTO's Agreement on Agriculture, Agreement on Subsidies and Countervailing Measures and the General Agreement on Tariffs and Trade 1994.

If the panel rules against India's sugar subsidies, India can approach the appellate body of the WTO's dispute settlement mechanism.

(By Commoditiescontrol Bureau)

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