Sugar production rises 20% to 17 million tonne

The country's sugar production climbed 20 per cent to 16.6 million tonne in the five months ended February 28 as mills crushed more cane from a record crop, according to the National Federation of Cooperative Sugar Factories.

India produced 13.28 million tonne in the year-ago period, said R K Agrawal, deputy secretary at the New Delhi-based association said today in a phone interview. India's sugar cane-crushing season runs from October to September.

Sugar output may reach a record 24 million tonne in the year to September, leaving a surplus of at least 3 million tonne for exports in the year ending September, according to the agriculture ministry.

Prices of white sugar have fallen 31 per cent from a May 12 peak of $497 a tonne amid concern of a global surplus.

"With Brazil talking of a bumper crop, there seems to be no relief for mills,'' said M Manickam, managing director of Tamil Nadu-based Sakthi Sugars. "The down-cycle may last another couple of years.''

Domestic sugar mills have exported 90,000 tonne of sugar since the government lifted a six-month ban in January, T Nanda Kumar, federal food secretary, said last week. The Centre has so far issued permits to export 600,000 tonne.

"We should be able to export 2 million tonne this season,'' said Manickam.

Global sugar output may be 161.8 million tonne in the year through September, 1.1 per cent more than previously forecast, as Brazil and India increase output, said F O Licht GmbH, a German commodity analysis company.

"Production will overshoot global demand in the first and second quarters, while last two quarters will see a deficit,'' F O Licht said in an e-mailed statement yesterday. The deficit can easily be met by the increase in stocks during October to March. Global sugar production was 152.1 million tonne last year.

The country's sugarcane production this year may reach a record 315.5 million tonne, up 12 per cent from a year ago, as farmers boosted planting last year to benefit from higher prices, according to the agriculture ministry.

The bumper output has raised the pressure on the government to build stockpiles to prevent a glut, said Agriculture Minister Sharad Pawar on February 20. The proposal will be discussed by the Cabinet, he said.