India’s sugar production falls 4.5%.

New Delhi: India’s sugar production fell 4.5% in the 12 months ended 30 September because last year’s deficient rainfall in sugar-producing states such as Maharastra and Tamil Nadu led to a drop in crushing and recovery.

India’s sugar output fell to 25.14 million tonnes in the year ended 30 September from 26.34 million tonnes in the previous year, according to industry body Indian Sugar Mills Association (ISMA).

During the 12 months ended September, 526 sugar mills in India crushed about 250.7 million tonnes of sugarcane, which was about 2.5% less than in the last sugar season, ISMA said on Monday.

Last year’s deficient rainfall also led to a decline in sugar recovery. Sugar recovery was at about 10.03% compared with 10.25% last year.

“Lower recovery and lower sugarcane crush was on account of last year’s lower than normal rainfall in Maharashtra, Karnataka and Tamil Nadu,” the statement said.

Sugar consumption in 2012-13 sugar season rose 3.6% to 22.8 million tonnes from 22 million tonnes. This means that the opening sugar balance for the sugar season 2013-14 will be 8.85 million tonnes.

“Markets see India exporting at least 1 to 1.5 million tonnes of sugar or raw sugar. India has surplus sugar and domestic prices are expected to decline,” said Tejinder Narang, an adviser at New Delhi-based trading company Emmsons International Ltd. “The accident at the Brazil terminal has affected export from there and sugar prices on the New York Exchange have gone up. Export contracts for 300,000 tonnes of sugar from India have already been concluded last fortnight.”

According to media reports a fire had badly damaged the Copersucar terminal at Brazil’s port of Santos in Sao Paulo state. The news sent the international sugar prices soaring as Brazil is the world’s biggest sugar producer.

Abinash Verma, director general of ISMA, said that the government needs to further raise the import duty to protect domestic markets where sugar prices are higher than imported sugar.

“With surplus sugar available in the country and when the Indian sugar industry is struggling to export the surplus to an unviable global market, there is absolutely no reason whatsoever to allow even 1 kilo of sugar to be imported. The current import duty of 15% is not enough to stop sugar imports and, therefore, the government should immediately increase the import duty to at least 40% to check all sugar imports into the country.”

Most sugar producing states registered a drop in sugar output, crushing and recovery except the state of Uttar Pradesh.

Source : livemint.com