Sugar production in the current season is likely to drop 5% due to rainfall in recent months and a delay in crushing by the UP millers due to tiff over cane prices.

 

Indian Sugar Mills Association (ISMA), the apex representative body of sugar industry, has revised the sugar production estimate to 23.8 million tonne from 25 million tonne for the October 2013-September 2014 season. 

 

“Due consideration has been given to weather conditions prevailing in the last several months, including heavy rainfall in certain parts of UP, availability of water in Maharashtra and north Karnataka and less availability of water in Tamil Nadu,” said ISMA in its notice on revised estimate. 

 

Major sugar producing states such as UP, Maharashtra, Karnataka, Tamil Nadu, Gujarat and Andhra Pradesh are expected to produce 6.6 million tonne, 7.8 million tonne, 3.5 million tonne, 1.5 million tonne, 1.17 million tonne and 0.95 million tonne, respectively. “The main reason behind the lower sugar production in UP was the diversion of sugarcane by farmers to alternative sweetener producers to make way for wheat sowing. Though recovery percentage is good in the state, yield is estimated to be lower than last year’s,” said ISMA. 

 

While the other states have maintained their production numbers, a major dip has happened in UP. 

 

The state sugar mills witnessed diversion of cane to gur and khandsari units due to the delay in crushing by over a month. Sugar mills in the state had shut their facilities in November last year to protest high cane prices. Sugar Futures Rise on Higher Demand 

MUMBAI Indian sugar futures ended nearly 2% higher on Thursday and may open firm in the next trading session due to good local demand and exports amid lower production. “Sentiments are firm in sugar as exports are good and local demand is also improving. Consumption of sugar would rise in the summer months,” said Mukesh Kuwadia, secretary of the Bombay Sugar Merchants Association. Indian sugar mills produced 16.86 million tonne in the first five months of the 2013/14 season that started on October 1, down 10.5% from last year. The key April contract ended 1.92% up at Rs. 2,912 per 100 kg on the National Commodity and Derivatives Exchange after hitting a high of Rs. 2,915 earlier in the day.