Agri Business

Sugar industry projects 2010-11 season production at 250 lt

Our Bureau New Delhi | Updated on March 11, 2011 Published on March 10, 2011

sugar   -  Business Line

Mills association makes case for export of 30 lakh tonnes

The country's sugar production in the current 2010-11 crushing season (October-September) will be in the region of 250 lakh tonnes (lt), yielding an exportable surplus of 30 lt, according to the Indian Sugar Mills Association (ISMA) and the National Federation of Cooperative Sugar Factories Ltd (NFCSFL).

“Last season, domestic consumption stood at 210 lt and based on sales trends so far, we don't expect it to exceed 220 lt. Given a likely production of 250 lt this season, there will be a surplus of 30 lt,” the ISMA President, Mr Narendra Murkumbi, told presspersons here on Thursday, while making a case for allowing more exports.

The Centre has, so far, permitted only advance license (AL) holders to export sugar, as part of discharging their re-export obligations against duty-free imports of raws undertaken in the past. The AL export quantity would add up to 10 lt, which, ISMA and NFCSFL claim, still leaves another 20 lt that can safely be shipped out.

During the current season till end-February, mills had produced 163 lt of sugar, which was 19 per cent more than the 137 lt in the corresponding five months of the 2009-10 season.

The 2009-10 season as a whole saw total production of 189.12 lt. A 20 per cent increase over that would come to about 227 lt, which, the industry, however, believes, is not a correct comparison.

“As the season started late this time and crushing will continue for a longer period, you will see much higher production. The right comparison would be with 2007-08, when production during October-February amounted to 169 lt and exceeded 263 lt in the entire season,” noted Mr Abinash Verma, Director-General of ISMA.

Production break-up

The 250 lt production estimate for 2010-11 by ISMA and NFCSFL includes 94 lt from Maharashtra, 64 lt from Uttar Pradesh, 36 lt from Karnataka, 16 lt from Tamil Nadu and 13 lt from Gujarat.

Mr Murkumbi said that the Centre should “immediately” permit export of 5 lt under open general license (OGL) – which it had, in fact, cleared in December, but subsequently kept on hold because of food inflation concerns.

“This is the right time to export not only because we have a surplus, but also the fact that global sugar prices will ease after May, when arrivals from Brazil will start,” he pointed out. This is reflected in raw sugar price trends at the InterContinental Exchange. While the nearest May 2011 delivery contract closed at 30.42 cents a pound on Wednesday, the corresponding quotes for July 2011, October 2011 and March 2012 were 27.77 cents, 26.22 cents and 25.43 cents, respectively.

Published on March 10, 2011
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