The Hindu Business Line : Sugar production may decline to 217 lakh tonnes

Mumbai, July 23 High inflation not withstanding, the sharp fall in sugarcane production may push up sugar prices to Rs 1,600 a quintal from the current level of Rs 1,485.

Mr Prakash Naiknavare, Managing Director, Maharashtra State Co-operative Sugar Factories Federation Ltd, said:“The sugar production in 2008-09 (October-September) is estimated to fall 20 per cent to 217 lakh tonnes (lt) against 273 lt. It may slip further by 14 per cent to 187 lt in 2009-10.”

Consequence to the fall in output, sugar prices are expected to rise to Rs 1,600 a quintal from Rs 1,485 now, he added.

Acreage & Output drop

In Maharashtra, the sugar bowl of the country, the output is estimated to drop 38 per cent to 57 lt (92 lt ), Uttar Pradesh 14 per cent to 65 lt (76 lt), Karnataka 25 lt (28 lt), Tamil Nadu 20 lt (25 lt) and Andhra Pradesh 10 lt (13 lt).

The area under sugar cane cultivation in Maharashtra is also expected to go down by 26 per cent to 8 lakh hectares in 2008-09 against 10.88 lakh hectares last year. Consequently, the cane output is expected to drop 21 per cent to 702 lt (855 lt), while cane available for crushing is estimated lower by 35 per cent at 500 lt (761 lt). Sugar production will be down 37 per cent to 57 lt (90.96 lt).

Exports lucrative

“Monitoring the sugar matrix in Maharashtra is more important as 70 per cent of the total output is supplied to other states,” said Mr Naiknavare.

Mr Shivajirao G. Patil, Chairman, Indian Sugar Exim Corporation Ltd, said the export market had also turned lucrative with Brazil shifting focus on ethanol from sugar as the crude prices on upward march.

It has bagged a major order to supply ethanol to Japan and is in talks with the US for a similar deal, he said. India’s raw sugar is in great demand in the international market and fetches a premium of $25 per tonne as they are dextrin-free.

India exported about 40 lt of sugar this season in which Maharashtra accounted for 22 lt. Of the total exports, raw sugar totalled to 63 per cent, while white sugar 37 per cent.

Welcoming the Government’s move to decontrol the sugar sector, Mr Patil said with ample buffer stock this is the right time for the Government to act on. However, it should be done in a phased manner and a roadmap should be put in place.

On the possibility of Government withdrawing Statutory Minimum Price indicators once the sector is decontrolled, Mr Naiknavre said a board should be set up to decide on the cane prices. This will ensure that farmers’ interest is protected.

Related Stories:
Sweet and sour
Bitter times ahead for sugar industry in Andhra Pradesh