Indian sugar mills association

Sugar may not be sweet story, but UP bullish of next crop

Date:	16 May 2017

Source:	The Economic Times

Reporter:	Jayashree Bhosale

News ID:	11574

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PUNE: As the sugarcane crushing season of Uttar Pradesh is about to get over with record sugar production, the state and industry is confident that UP's sugar production next year will likely surpass current year's production and cross 9 million tonne.

However, this may not help tame sugar prices in the country, as closing inventory for 2017 sugar season is expected to fall sharply.

“We are confident that our sugar production will cross 9 million tonne next year as the area under a new sugarcane variety has increased substantially, even up to 80 per cent in case of some sugar mills,“ said a high level official of UP cane commissioner's office. The state expects to pro duce 8.8 million tonne.

Ratings agency Crisil has estimated that India's 2017-18 sugar production will at best be 25 million tonnes, up from cur rent year's estimated sugar production of 20.3 million tonne.

Crisil expects UP to produce 9 million tonne driven by increase in high yield variety cane and increased acreage as a result of lower cane arrears, while production in Maharashtra should be 7 million tonne due to increased acreage and better monsoon.

“Domestic sugar prices are likely to remain firm in sugar season 2017 (SS2017) and SS2018. That's because closing inventory for SS2017 is expected to fall sharply to 2.2 months of consumption compared with 3.8 months of consumption for SS2016 following a fall in production in Maharashtra and Karnataka,“ stated a recent Crisil analysis.

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