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Sugar prices to decline as UP, Maharashtra begin cane crushing

The market expects a rise in sugar output of 24% this year

Dilip Kumar Jha  |  Mumbai 

Mills in UP have decided to start crushing without clarity on the SAP

are likely to decline by five per cent with the arrival of new-season output. Crushing of new-season is scheduled to begin this week, with dozens of mills in starting the procuring from The first of this sugar is scheduled to hit the market by the end of this month. On the state government's recommendation, mills in are also set to commence crushing of on November 1, two weeks later than they'd originally planned. at the Navi Mumbai wholesale market (M-30 variety) have been at Rs 3,840-3,900 a quintal for nearly two months. The carryover of for the new sugar year (it began on October 1) is about four million tonnes. The market expects a rise in of 24 per cent this year. "Mills in and UP are offering discounts to consumers for delivery in the second week of November. Hence, are likely to decline with arrival of new-season crop," said Praful Vithalani, chairman, Mills in UP are offering Rs 3,650-3,680 a quintal for delivery in the second week of November; those in for Rs 3,400-3,450 a qtl. "Sugar's price would not decline abnormally.

We estimate a marginal increase in SAP (the government-set minimum) in UP, which would keep cost of production elevated. To get farmers' arrears cleared, mills' realisation has to be higher than the cost of production," said a senior industry official. Mills in UP have decided to start crushing without clarity on the SAP; the government announcement is expected soon. An increase in SAP will partly offset their expected increase in sugar recovery with a new variety. Indian Association has forecast production at 25.1 million tonnes for the current crushing season (October 2017 to September 2018), a sharp increase from 20.3 mt the previous year. chart

First Published: Fri, October 27 2017. 02:23 IST