MUMBAI: The Indian government has asked regional cane commissioners to take action against sugar mills selling sugar below a government-mandated price, a letter seen by Reuters showed.
The sugar mills are facing a cash crunch as they also have to pay stipulated prices to buy cane from farmers at a time when there is a glut of sugar, and they are heavily in arrears in those payments.
They are under intense pressure from Prime Minister Narendra Modi’s ruling Bharatiya Janata Party to make those payments as failure to do so could turn the sugar farmers, a powerful voting bloc, against it in the general election in April-to-May. .
The world’s biggest sugar consumer introduced a floor price for the sweetener last year to help the mills and the farmers. Last month it raised the minimum selling price (MSP) of sugar to 3,100 rupees ($45.01) per 100 kg from 2,900 rupees but despite that order several mills sold sugar below the MSP, which threatens to undermine the initiative.
“Sugar mills of your state may be advised to strictly adhere to directives of Government regarding MSP of white/refined sugar and action may be taken for violation of Sugar Price (Control) Order,” the federal food and public distribution department said in a March 20 letter to state cane commissioners.
Some mills were selling sugar below the MSP while others are selling sugar at MSP inclusive of a nationwide sales tax, which is in breach of the directive, the ministry wrote.
The sugar price control order allows the government to conduct searches in factories, and penalties include the possible seizure of stocks of mills violating the rule.
India has provided various sops to the ailing sugar industry in the past year but mills still owe cane farmers more than 200 billion rupees as refined sugar prices have fallen below the cost of production.
The sugar mills include Balrampur Chini Mills, Bajaj Hindusthan, and Shree Renuka Sugars.
Fears of a government crackdown on mills led sugar lobby group, the National Federation of Cooperative Sugar Factories Ltd. (NFCSF), to write to its members this week seeking compliance.
“Due to the cash crunch some mills were selling sugar below MSP and piling pressure on other mills that follow the rules,” said Prakash Naiknavare, managing director of NFCSF.
The sugar commissioner in western Maharashtra state, the second-biggest sugar producer in the country, has summoned sugar mill representatives on Thursday to discuss the sale of sugar below MSP, according to industry officials.
“In Thursday’s meeting the sugar commissioner of Maharashtra will review how mills are subverting the law,” said Sanjay Khatal, managing director, Maharashtra State Cooperative Sugar Factories Federation.
India is set to produce more than 32 million tons of sugar for the second straight year in 2018/19, overshooting the local demand of around 26 million tons, trade bodies estimate.
Mills have also been struggling to export surplus sugar as global prices are far lower than local prices. To encourage exports, India has given sugar mills transport subsidies of 1,000 rupees a ton to 3,000 rupees a ton, depending on their distance from ports.
New Delhi has set a sugar export target of 5 million tons, but mills are likely to export around 3 million tons in 2018/19, said Naiknavare of NFCSF.
India to crack down on sugar sales below floor price
India to crack down on sugar sales below floor price
- The sugar price control order allows the government to conduct searches in factories
- India is set to produce more than 32 million tons of sugar for the second straight year in 2018/19
UAE, Ukraine sign comprehensive economic partnership deal
JEDDAH: The UAE and Ukraine have signed a Comprehensive Economic Partnership Agreement, removing customs duties on 99 percent of Emirati goods and 97 percent of Ukrainian exports to boost trade and investment.
The agreement aims to unlock new trade and investment opportunities, fostering deeper economic ties between the countries, reported the Emirates News Agency.
The signing ceremony was attended by UAE President Sheikh Mohamed bin Zayed Al-Nahyan and Ukrainian President Volodymyr Zelenskyy, marking a major step in enhancing bilateral economic cooperation.
This follows the UAE’s signing of CEPAs since 2021 with countries like India, Indonesia, Turkiye, Israel, Malaysia, Jordan, and Morocco to boost trade, attract investments, and protect exports and intellectual property.
The UAE president emphasized the strategic importance of the CEPA, highlighting its role in boosting bilateral trade and advancing both nations' economic ambitions. He expressed confidence that the agreement would strengthen economic relations and contribute to sustainable development.
Zelenskyy echoed these sentiments, emphasizing that the agreement would benefit both Ukraine and the UAE, expanding economic cooperation and providing new opportunities for growth.
The CEPA agreement was signed in a formal ceremony at Qasr Al-Shati by UAE Minister of State for Foreign Trade Thani bin Ahmed Al-Zeyoudi and Ukraine’s First Deputy Prime Minister and Minister of Economy Yulia Svyrydenko.
The deal is projected to contribute $369 million to the UAE’s gross domestic product and $874 million to Ukraine’s by 2031. It is also expected to accelerate Ukraine’s economic recovery and create new opportunities in sectors such as infrastructure, heavy industry, and aviation, as well as aerospace, and information technology, according to WAM.
The deal was signed after the two countries expressed their intent to negotiate a CEPA in December 2022, following over $3 billion in trade and investment commitments made during Zelenskyy’s visit to the UAE in February 2021.
Bilateral trade between the UAE and Ukraine totaled $372.4 million in 2024, down from $385.8 million in 2023. Joint foreign direct investment reached $360 million by 2022, covering sectors like logistics, infrastructure, tourism, and advanced technology.
The CEPA aligns with the UAE’s broader strategy to expand its global trade partnerships and increase investment across various sectors. The country aims to grow its non-oil trade to 4 trillion dirhams ($1.1 trillion) by 2031, with international trade playing a central role in its economic vision.
Closing Bell: Saudi benchmark index edges down to close at 12,266
RIYADH: Saudi Arabia’s Tadawul All Share Index edged down on Monday, losing 105.61 points, or 0.85 percent, to close at 12,266.46.
The total trading turnover of the benchmark index was SR5.4 billion ($1.2 billion), as 41 stocks advanced, while 201 retreated.
The MSCI Tadawul Index also declined by 15.52 points, or 1.01 percent, to close at 1,521.64.
The Kingdom’s parallel market, Nomu, lost 92.37 points, or 0.29 percent, to close at 31,644.81. This comes as 30 stocks advanced while 52 retreated.
Arabian Internet and Communications Services Co. emerged as the best-performing stock, with its share price surging by 4.82 percent to SR355.
Other top performers included Al Hassan Ghazi Ibrahim Shaker Co., which saw its share price rise by 3.90 percent to SR29.30, and Shatirah House Restaurant Co., which saw a 3.65 percent increase to SR23.26.
Abdullah Saad Mohammed Abo Moati for Bookstores Co. rose 3.02 percent to SR42.70, while Jamjoom Pharmaceuticals Factory Co. gained 2.74 percent to SR164.80.
Anaam International Holding Group saw the steepest decline of the day, with its share price easing 5.80 percent to close at SR24.68.
Al Mawarid Manpower Co. fell 3.45 percent to SR134.20, while Al Majed Oud Co. dropped 3.28 percent to SR171.20.
Middle East Healthcare Co. also faced a loss in today’s session, with its share price dipping 2.99 percent to SR81.20, while Mutakamela Insurance Co. saw a 2.77 percent to settle at SR17.52.
On the announcements front, Dar Al Arkan Real Estate Development Co. has fully redeemed its $600 million sukuk from its 2025 Series 6 Medium-Term Note program.
In a bourse filing, the company confirmed that the sukuk was paid in full on its due date, with the principal amount transferred to the designated account.
The sukuk, valued at $600 million, was originally issued on Oct. 15, 2019, with a trading end date of Feb. 15.
Dar Al Arkan utilized its internal resources to meet the obligation, ensuring a smooth redemption process. HSBC Bank served as the transaction’s paying agent and sukuk holders’ agent.
A total of 3,000 sukuk units, each with a par value of $200,000, were redeemed, representing 100 percent of the issued amount.
Sukuk holders are scheduled to receive their respective amounts in their accounts on Feb. 17.
The financial impact of the redemption will be reflected in the company’s first-quarter 2025 results.
Dar Al Arkan acknowledged the role of its investors and sukuk holders in the transaction, emphasizing their continued trust in the company, its board, and its executive management.
Turkiye faces fiscal strain as earthquake reconstruction pushes spending, says minister
RIYADH: Turkiye’s efforts to tighten fiscal policy are being hampered by the financial burden of earthquake reconstruction, Finance Minister Mehmet Simsek said, as the government grapples with balancing spending and economic stability.
Speaking during a closing panel at the AlUla Conference for Emerging Market Economies, Simsek said the country’s fiscal position remains under pressure due to ongoing rebuilding efforts.
Turkiye was struck by a 7.8-magnitude earthquake and a powerful aftershock on Feb. 6, 2023, devastating 11 provinces, killing over 53,000, and causing $34.2 billion in damages — 4 percent of its 2021 gross domestic product, according to a World Bank rapid damage assessment report. The estimate covered direct physical damage but did not account for indirect or secondary economic impacts.
“We have spent about $74 billion over the past two years, which is equivalent to just over 6 percent of GDP on earthquake reconstruction because we are building cities from scratch. Currently, 450,000 units are under construction; it’s the whole infrastructure,” Simsek said.
“Last couple of years, fiscal deficit to GDP has been around 5 percent, which is relatively high by Turkish standards. This year, we aim to bring it down to about 3 percent, so fiscal adjustment is underway,” he added.
The fiscal challenges come as Turkiye’s government pledged in March to continue tightening policy to curb inflation. The same month, Fitch Ratings upgraded Turkiye’s credit rating to “B+” from “B,” citing a more disciplined approach to monetary policy.
Despite headwinds, Simsek said inflation expectations are improving, albeit slowly.
“Inflation expectations are improving, but it’s been sluggish, in particular among households and among, you know, corporates, while markets obviously tend to have a better reading of what we are saying,” he said.
He emphasized that there is no substitute for better policies, stressing that the key lies in sound policymaking and effective execution. “For this year, it’s a combination of tight monetary policy and tighter fiscal policy combined with a more supportive incomes policy,” he said, adding that these measures should help sustain disinflation, which is crucial for improving expectations.
Macroeconomic stability
During the panel, Egypt’s minister of planning, economic development, and international cooperation, Rania Al-Mashat, said investing in resilience is an investment in the future.
“There are first principles that we all agree on, macroeconomic stability, this is a necessary condition if we want to move forward on privatization, if we want to move forward on confidence and credibility internally and externally,” Al-Mashat said.
She pointed to recent reforms that have stabilized Egypt’s economy, particularly in the foreign exchange market, and noted a retrenchment in public investment. “Right after March, you can see the manufacturing non-oil sector moving forward. We can see more exports taking place once the intermediate inputs into production were actually pushed,” she added.
Pakistan’s Finance Minister Muhammad Aurangzeb echoed the emphasis on fiscal responsibility, saying the country has achieved a primary surplus through disciplined management.
“Our taxes to GDP ratio has been languishing between 9 to 10 percent. That sort of moved in the direction of 10.8 percent at the end of December. We have agreed to move it to 13.5 percent to join the committee of nations and to bring a certain level of sustainability to the primary surplus that we have,” Aurangzeb said.
“On the other side, it’s also discussion on the expenditures and making tough policy choices with respect to what is a good cost and bad cost,” he added.
Brazil’s economic outlook
Brazil’s Finance Minister Fernando Haddad said the country’s central bank has played a key role in bringing inflation under control while maintaining growth.
“We are growing in the last two years around 3.4 percent a year, contradicting all of the predictions both domestic and international,” Haddad said.
“And we understand that the fiscal adjustment that we’re doing is not recessive because we’re guaranteeing a growth rate of 3.4 percent around a decline in inflation,” he added.
Organized by the International Monetary Fund and Saudi Arabia, the first edition of the high-level annual conference in AlUla aimed to address global economic challenges. The two-day event brought together finance ministers, central bank governors, and policymakers, alongside leaders from the public and private sectors, international institutions, and academia.
Emerging economies must ‘punch their weight’ in global policy
RIYADH: Emerging economies must play a greater role in global economic discussions, Saudi Arabia’s Minister of Finance, Mohammed Al-Jadaan, said at the closing of the AlUla Conference for Emerging Market Economies.
Organized by the Saudi Ministry of Finance and the International Monetary Fund, the forum highlighted the need for developing nations to assert their global influence, focusing on economic diversification, deregulation, and digital transformation.
Al-Jadaan stressed that emerging markets play a crucial role in shaping international economic policies and must be confident in their contributions.
“Emerging economies will need to punch their weight. They need to gain more confidence, they need to acknowledge, understand—even with humbleness—that they have something to say to the world,” he said.
He also criticized the dominance of advanced economies in global decision-making forums, emphasizing that “advanced economies have a lot to say, but they cannot resolve a lot of the key global issues alone.”
IMF Managing Director Kristalina Georgieva echoed this sentiment, highlighting that economic growth and dynamism are increasingly driven by emerging markets.
“Where is the youth population? Where is the potential for high growth that benefits everybody? It also benefits advanced economies—it is in the emerging world,” she said.
Georgieva outlined three critical steps for emerging markets: diversification, deregulation, and digitalization.
“Diversify your economy, your trade relations, your engagement, your vision for how you move forward,” she urged.
She also emphasized the role of government in facilitating economic growth by reducing unnecessary regulations.
“The government should do that—give indication as to where, what is the direction to travel, and then get out of the way,” she said, calling for the removal of bureaucratic obstacles.
Finally, she stressed the necessity of embracing digital transformation, particularly in artificial intelligence and financial transparency, to ensure competitiveness in a rapidly evolving global economy.
The conference, described by Al-Jadaan as “possibly the first global forum” dedicated solely to the economic prospects of emerging markets, provided a platform for leaders to discuss pressing challenges and opportunities.
“Bringing experts and discussing issues, challenges, and means of actually cooperating and working together to improve the lives of the people and the emerging economies and the world at large” was a core objective, he said.
As the event concluded, Georgieva asked the audience if they would be interested in a second edition of the conference, receiving an enthusiastic applause.
She confirmed that the IMF and the Saudi Ministry of Finance would document key takeaways and begin preparations for future discussions.
“We will work with our regional office and the Ministry of Finance so we can publish proceedings from the conference. But also, we will start immediately on thinking about how we bring this forward,” she said, indicating prospects for another conference edition.
Georgieva expressed optimism about the future of emerging economies, stating her vision for a world where developing nations are no longer seen as “emerging” but as equal players in the global economy.
“My dream, by the time I finish my term, is that we retire the term ‘emerging’ because you will have fully emerged,” she said.
Dentsu CEO vows to help shape Saudi Arabia’s Vision 2030 through innovation
DUBAI: Japanese marketing and advertising firm Dentsu Group is expanding into Riyadh as it seeks to support the Kingdom’s transformation, according to its CEO.
Speaking to Arab News Japan, Hiroshi Igarashi said his firm is in alignment with Saudi Arabia’s Vision 2030 diversification initiative.
Through Dentsu Sports International in the Middle East, the company aims to reshape the Kingdom’s sports and entertainment landscape, delivering fan-centric experiences through sponsorships, digital engagement, and analytics.
“Saudi Arabia is positioning itself as a global hub for media, sports, and technology. Our ‘One Dentsu’ model aligns with Vision 2030’s focus on efficiency, innovation, and collaboration,” Igarashi said.
The ‘One Dentsu’ model, led by Deputy Global Chief Operating Officer Takeshi Sano, integrates media, creative and digital services for tailored business impact.
Igarashi told Arab News Japan that the company is a growth partner focused on digital transformation, not just acting as a service provider.
He said it was important to leverage global expertise in digital marketing, brand building and data solutions to empower local and international brands.
“Saudi Arabia is setting new standards, and we bring global best practices combined with local insights,” Igarashi said.
He highlighted how Dentsu’s Japanese roots, built on trust and precision, resonate with Middle Eastern business values: “We merge Japanese craftsmanship with global agility to drive lasting success.”
The CEO added: “We prioritize measurable results over media scale, offering clients a strategic edge in a fast-evolving market.”
