Sugar mills face margin squeeze

Most sugar mills had reported healthy profits in the October-December quarter last year

The profit margins of sugar mills are likely to remain under pressure in October-December due to a sustained decline in the price of sugar following forecasts of higher production. The food ministry recorded a 7 per cent decline in the average sugar price in December to Rs 3,470 a quintal from Rs 3,733 a quintal a year ago. The average sugar price has declined by nearly 2 per cent in October-December from the same quarter a year ago.

Mills produced 6.94 million tonnes of sugar till December 15, up from 5.35 million tonnes a year ago, and are selling sugar at