Sugar output to remain high: Isma

Although mills started crushing late this year, production increased 19 per cent.

The Indian Sugar Mills Association (Isma), has kept the output forecast unchanged, despite several adversities faced by crushing firms across the country.

“We are keeping our fingers crossed on the previous forecast made in the beginning of the crushing season at 26 million tonnes (mt) for the current sugar season (October 2011-September 2012)," said Abinash Verma, secretary general of Isma.

Output till December 15 was reported at 4.58 mt, a rise of 19 per cent from 3.86 mt in the same period last season. Higher output, however, can be attributed to more mills remaining operational this year.

As against 445 mills reported functional last year till December 15, as many as 452 were crushing by the same time this season.

Though mills started crushing slightly late this year, especially in the largest-producing state, Maharashtra, production has registered an overall jump of 19 per cent.

Similarly, the second-biggest producing state, Uttar Pradesh, registered a significant jump in production of 1.29 mt till December 15, compared to 0.86 mt for the same period last year.

The output in Maharashtra was reported 12,500 tonnes higher at 1.75 mt by December 15 this year, compared to 1.63 mt in the same time last year. The think tank in Maharashtra earlier forecast output at 9.3 mt, later revised downwards to 8.7 mt. With the higher recovery noticed through crushing of the early variety cane, the output forecast has been restored to 9.3 mt.

Similarly, production in Karnataka during the same period is also higher at 82,500 tonnes, compared to 73,500 tonnes last year.

Meanwhile, the case filed by mills challenging the Uttar Pradesh government’s cane pricing (state advised price or SAP) formula in the Allahabad High Court was deferred again on Monday. It is scheduled to come for hearing on Thursday.

The mills in Uttar Pradesh have been paying Rs 240-250 per quintal for cane since the beginning of the season, compared to Rs 205-210 a quintal in the previous one.

At the current price, the industry is incurring a loss of Rs 2.50 a kg.

“Whatever money is lost for extra payment for price is lost forever. There is no precedent in India to recover money from farmers. Hence, early resolution of the case would provide relief for the industry," said a senior industry source.

Mills produced 24.5 mt during the last season. Estimating higher output this season, Verma said, “A clear picture would emerge by January-end. For the time being, we estimate a 26 mt output for the current season."

PTI adds: The wholesale sugar market ended on a flat note on Monday, as prices moved in a narrow range on alternate bouts of trading and settled at previous levels.

Marketmen said an adequate stocks position against sporadic demand mainly kept prices steady.