New Delhi, March 15: The country's sugar production dropped 1% till mid-March from a year before as around one-fifth of mills have closed crushing operations for the season.
Sugar production touched to 21.05 million tonnes since the marketing year started on October 1, compared to 21.25 million tonnes a year before, as 130 mills have completed cane crushing for the season compared to 74 last year, showed the data released by the Indian Sugar Mills Association (ISMA) on Friday.
ISMA retains its forecast of a 7.3% drop in sugar output from a year earlier to 24.3 million tonnes for 2012-13 due to poor monsoons.
"As was expected, the production from Maharashtra has slowed down during the last 15-20 days and for the first time in the season, the actual production is lower than last year when up to March 15, 7.22 million tonnes have been produced, compared to 7.27 million tonnes last year. The recovery is also lower this year at 11.23% as compared to 11.44% last year," ISMA said.
However, both the top sugar industry bodies--ISMA and National Federation Of Co-operative Sugar Factories Ltd --have also said the country's sugar production is likely to exceed demand in the current marketing year, keeping domestic supplies steady. The country needs around 22-23 million for annual consumption. While the government has projected output at 24.5 million to 25 million tonnes, NFCSF has forecast production of 24.5 million tonnes in 2012-13.
Higher production has prevented a flare-up in commodity prices this year following steady rise until August on fears that poor showers in June and July would hurt cane yield, especially in biggest producer Maharashtra.
Retail sugar prices, on an average, remained flat around R38 a kg, thanks to good production so far and more offloading of the sweetener in the open market. However, exports are still not viable as domestic prices are ruling above those of comparable global varieties.
UP produced 5.9 million tonnes of sugar, compared to 6.04 million tonnes a year before.
The recovery rate in the state so far is 9.05%, compared to 8.95% in the same period last year. Kar nataka has produced 3.18 million tonnes so far from 3.26 million tonnes a year before.
Tamil Nadu produced 1.15 million tonnes till March 15 from 1.11 million tonnes in the corresponding period last year, while Andhra Pradesh produced 920,000 tonnes from 970,000 tonnes from a year earlier.