Maharashtra's sugar output down 50%; prices may rise

Leading sugar producing state Maharashtra has registered a 50 per cent decline in production during October-April 2009 to 4.6-million tonnes, a top industry official has said.      

"Maharashtra has registered a 4.6-million tonnes of sugar production in the season ended October-April as compared to 9.1-million tonnes in the previous year, posting a decline of around 50 per cent," Maharashtra State Co-operative Sugar Factories Federation Managing Director Prakash Naiknavare told PTI.      

Maharashtra contributed 31 per cent of India's total sugar production.      

The industry was expecting a decline by over 30 per cent to around 6-million tonnes (MT) in the ongoing 2008-09 season mainly due to low sugarcane produce.      

The non-availability of sugarcane and dry weather were the reasons for lower output, Naiknavare said.      

Sugar mills in Maharashtra crushed only 40-MT of cane as compared to 76.1-million tonnes a year ago, he said.      

The latest ex-factory rate of sugar in Maharashtra is Rs 2,150 per quintal for the S30 grade and Rs 2,190 for M40 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," Naiknavare said.

However, the sugar production will touch 6 million tonnes next year and become normal in two year's time, Naiknavare said.      

There will be an overall demand and supply mismatch and the industry has requested the government to allow duty-free imports, he said.      

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 licencing on a tonne-to-tonne basis for raw sugar imports.      

Once the extension is granted, Indian sugar mills are expected to import around 5,00,000 metric tonnes of raw sugar by end-May or the first week of June. Indian state-run trading firms have already contracted to import an additional 30,400 tonnes of white sugar from Brazil and Thailand.      

State Trading Corporation of India Ltd has ordered 25,000 tonnes from Thailand and another government firm, MMTC Ltd, has contracted 5,400 tonnes from Brazil, industry officials said.