Sugar output may fall by 4% in 2016-17, but no need to import

India's sugar production is likely to fall by 4 per cent to about 24 million tonnes in the next marketing year starting October due to lower cane output, but there will not be any need to import as the country has sufficient stock, according to industry body ISMA.
Sugar production of India, the world's second largest producer after Brazil, is likely to fall at about 25 million tonnes in the ongoing 2015-16 marketing year (October- September) from 28.3 million tonnes in the previous year.
"Based on the sugarcane planting area, sugar production is expected at at least 24 million tonnes in the next season," Indian Sugar Mills Association (ISMA) President Tarun Sawhney told reporters here today on the sidelines of an event.

He said the production in Maharashtra and Karnataka is expected to fall due to lower cane plantation in the two drought-affected states, but the same would be compensated by the Uttar Pradesh and Tamil Nadu millers to some extent.
Asked about the need to imports in next season, Sawhney said: "We have more than enough sugar sugar in the country. We don't want any import of sugar in the country."
The association wants the sugar import duty to continue at 40 per cent, he added.

The closing stock at the end of the season would be around 7-7.5 million tonnes, taking the total sugar availability to over 31 million tonnes in the 2016-17 season, he said, while pegging the domestic demand at 26 million tonnes.

"Sugar stock at the end of 2016-17 season which is September next year would be around 5 million tonnes, which is sufficient for 2-3 months consumption," Sawhney explained.
On rising retail prices of sugar, ISMA President said that the trade margins have increased and same should not be more than Rs 6 per kg.
Sawhney said the mills would be comfortable with Rs 36 per kg ex-mill price of sugar, which means retail price of Rs 42 per kg. The average ex-mill price of sugar is currently at Rs 33 per kg.
Recently, the Centre had said that there would not be sugar shortage in the country in the 2016-17 season despite lower domestic output, as the total availability at 30-31 million tonnes would be suffice to meet the demand.

"...Notwithstanding any shortfall in sugar production during 2016-17 sugar season (estimated 23-24 million tonnes), the total availability in India (30-31 million tonnes) would be sufficient to meet the domestic consumption," the Food Ministry had said in a statement.
As the sugar prices crossed Rs 40 per kg in the retail markets, the Centre has empowered state governments to impose stockholding limits on sugar traders.