Sugar mills body, the Indian Sugar Mills Association (Isma), revised production estimates marginally upwards, as higher-than-expected recovery was reported in Uttar Pradesh, India's second-largest producer.
From its earlier estimate of 24.3 million tonnes (mt), refined sugar output is now expected to be 24.6 mt.
"Considering the actual output so far and production trends from some states, we have reviewed the estimates for the current season and have revised them to 24.6 mt, about 0.3 mt higher than the previous estimates," Isma said in a note.
Unless, the upward output revision is supported with favourable government policies, including decontrol of the sector, additional output is set to aggravate existing problems for crushing mills.
India's annual sugar consumption is estimated at 23.5 mt, slightly lower than this year's projected production.
Meanwhile, sugar output in India recorded a marginal decline on lower availability of cane for crushing this year. Data compiled by Isma showed total output to be 21.05 mt as on Friday, compared to 21.25 mt at the same time last year. Isma said mills have advanced the closing of the current season due to non-availability of cane. Consequently, around 130 mills have already announced closure for the current season this year versus 74 mills last year.
As a result, the number of operating mills has come down to 390 now from 520 earlier.
Uttar Pradesh, the second-largest producer, recorded an output of 5.9 mt till Friday against 6.04 mt in the same time last year. In the state, 119 mills are still under operation as compared to 107 last year. The average recovery was recorded at 9.05 per cent compared to 8.95 per cent last year.
As was expected, the production from Maharashtra, India's largest producer, has slowed down during the last 15-20 days and for the first time in the season, the actual production is lower than last year. By March 15, 7.23 million tonnes of sugar output was recorded compared to 7.27 million tonnes last year. The recovery is also lower this year at 11.23 per cent from 11.44 per cent last year.
Karnataka has reported a marginal decline in its production 3.18 million tonnes compared to 3.26 million tonnes last year. Sugar production in Tamil Nadu was reported at 1.15 million tonnes by March 15, 2013 compared to 1.11 million tonnes by the same time last year.