With the festive season upon us and as the new crushing season begins later this month, the sugar stocks are in focus.
Vijay Banka, Wholetime Director & CFO, Dwarikesh Sugar said Diwali looks good because the sugar sales have been good in month of October as well as the earlier months.
He said they commenced this quarter with opening stock of 9.78 lakh quintals of sugar and have already sold nearly 8.5 lakh quintals – the sales have been brisk and the average price of sugar for the quarter has been around Rs 36.50- 36.75 per kg, said Banka.
The new crushing season would commence maybe a week after Diwali, he said, adding that they were awaiting the announcement of sugar prices going forward.
For the new sugar season they expect a 12-15 percent increase in crushing numbers and a similar increase in production, he said. For the last year the company produced 33 lakh quintals of sugar, he added. ISMA has estimated output is at 25 million tonnes for the year.
Talking about pricing scenario, he said government’s fear of unexpected flare up in sugar prices is not correct because they have remained in control around Rs 3700/ quintal. So, they do not expect a flare up in sugar prices and going forward expect it to remain in the region of Rs 3600-3700 per quintal, said Banka.
For the coming season, after many years the production and demand will be evenly balanced, which may lead to balanced stock situation, said Banka.
When asked how Uttar Pradesh is looking at state advised price (SAP) and fixed remunerative price (FRP) prices, he said the right time to introduce FRP would be when the gap between SAP and FRP is compressed and is very narrow and less.