Sugar output may fall 9 pc in 2015-16 to 26 mn tonne: ISMA

India's sugar production is likely to fall 9 per cent to 26 million tonnes in the year ending September, with industry body ISMA today revising its output estimate downwards by 1 million tonne due to lower yields in the wake of deficit rains.
"We have revised the sugar production estimates to 26 million tonnes in 2015-16 marketing year (October-September) from the earlier projection of 27 million tonnes," Indian Sugar Mills Association (ISMA) Director General Abinash Verma told reporters here.
The production estimates have been cut mainly because of a drop in output in Maharashtra and Karnataka.
ISMA's latest production estimates are in line with the government's forecast.

Mills have produced 11.09 million tonnes till January 15 of this marketing year, up 7 per cent from the year-ago period.
Sugar production of India, the world's second-largest producer after Brazil, stood at 28.3 million tonnes in 2014-15 marketing year.

"Sugar production in Maharashtra is likely to be around 87 lakh tonnes, lower by 3 lakh tonnes compared with ISMA's first advance estimates of 90 lakh tonnes made in September 2015. This is mainly because of lower water availability, which adversely affected yields in Maharashtra," ISMA said.
Sugar production in Karnataka may fall to 43 lakh tonnes, from 49.2 lakh tonnes estimated earlier.

ISMA said the all-India ex-mill sugar prices have improved to around Rs 2,950 per quintal, but are still lower than the production cost.
The average cost of production on an all-India basis is currently between Rs 3,300 and Rs 3,500 per quintal of sugar, including cost of finance.
"Sugar mills are, therefore, still unable to cover their costs. It is, therefore, feared that if the current ex-mill prices do not improve to allow them to cover their costs, there would be additional cane price arrears of farmers and defaults in repayment of bank loans. Cane price arrears of previous season as on today are about Rs 2,500 crore," it said.