UP sugar output may jump 35% next year

Sugar production in Uttar Pradesh, India’s biggest grower, may gain for a second year as farmers increase plantings after a global deficit drove prices to near a three-decade high in February, a producers’ group said.

Output may surge 35 per cent to 7 million tonnes (mt) in the year beginning October 1, from an estimated 5.2 mt this season, said Shyam Lal Gupta, secretary general of the Uttar Pradesh Sugar Mills Association. The area under the crop will widen by as much as 25 per cent, he added.

“Farmers have got unimaginably high prices for cane this year and they will devote the entire crop land to sugar,” Gupta said.

Increased output may reduce the need to import, pressuring raw-sugar prices that have tumbled 46 per cent from the February peak amid bets that global output will rebound. India became a net buyer in 2008 after cane growers switched to wheat and oilseeds, and last year’s drought ravaged crops.

Production in Uttar Pradesh has totaled 5.15 mt since the season started on October 1, compared to 4.05 mt last year, Gupta said. Millers in the state have processed 56.4 mt in the crushing period that is drawing to an end. All mills, barring two, have stopped operations, he said.

Sugar recovery averaged 9.1 per cent this season, compared to 8.9 per cent a year earlier.

India’s production this year till September will be 18.5 mt and may advance further to 23 mt in the 2010-2011 season, said Vinay Kumar, managing director of the National Federation of Cooperative Sugar Factories.