MUMBAI: Maharashtra the major sugar producing state has registered a 50% decline in production during October-April 2009, a top industry official has said. “The state has registered a 4.6-million tonnes of sugar production in the season ended October-April as compared to 9.1-mt in the previous year, posting a decline of around 50%,” Maharashtra State Co-operative Sugar Factories Federation MD Prakash Naiknavare said here on Wednesday.
Maharashtra contributed nearly 31% of the country’s total sugar production. The industry was expecting a decline by over 30% to around 6-million tonnes in the ongoing season mainly due to a lower sugarcane produce. The non-availability of sugarcane and dry weather were the reasons for lower output, Mr Naiknavare said. Sugar mills in Maharashtra crushed only 40-mt of cane as compared to 76.1-mt a year ago, he said. The latest ex-factory rate of sugar in Maharashtra is Rs 2,150 per quintal for the S-30 grade and Rs 2,190 for M-30 grade.
“I anticipate that lower output by both leading sugar producers, Maharashtra and Uttar Pradesh, may lead to firming up of sugar prices by Rs 100-200 per quintal in the next few weeks,” Mr Naiknavare said. However, production will touch 6 mt next year and become normal in two year’s time, he said. There will be an overall demand and supply mismatch and the industry has requested the government to allow duty-free imports, he added.
Mr Naiknavare pointed out that sugar producers in Maharashtra were not able to take advantage of government schemes. They are approaching the government to seek extension of the advance licensing on a tonne-to-tonne basis for raw sugar imports.
Once the extension is granted, local sugar mills are expected to import around 500,000 metric tonnes of raw sugar by end-may or the first week of June. State-run trading firms have already contracted to import an additional 30,400 tonnes of white sugar from Brazil and Thailand.
The STC has ordered about 25,000 tonnes from Thailand and another state-run agency, MMTC, has contracted 5,400 tonnes from Brazil, industry officials said. Meanwhile, in futures sugar prices slipped on Wednesday as some traders pocketed gains on concerns the new government may take aggressive steps to curb price rise of the commodity, analysts said.
“Spot traders are waiting for election outcome. Demand is very weak,” Ashokkumar Jain, a trader and member of the Bombay Sugar Merchants Association, said. Prices in the spot market in Maharashtrar, edged 0.3% lower at Rs 2,257.8 per quintal.
The benchmark June contract on the National Commodity and Derivatives Exchange had risen 17.6% in 2009. But a rally in sugar prices in overseas markets and lower supplies in the domestic market limited the downside, analysts said.
Source : The Economic Times