Sugar output likely to rise 4% in 2014-15

Written by fe Bureau | New Delhi | Updated: Oct 30 2014, 09:38am hrs
Sugar output in India will likely rise 4% in the current marketing year that started on October 1, marking a fifth straight year of surplus stocks for the world's second-largest producer and biggest consumer.

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In a meeting with senior food ministry officials on Wednesday, cane commissioners of various producing states projected the country's sugar output at 25.50 million tonne for 2014-15, compared with 24.50 million tonne a year earlier.

There will not be a situation of crisis. Production will be higher by few lakh tonne than last year, Union food secretary Sudhir Kumar said after the meeting.

Kumar said mills in Uttar Pradesh have assured the state's cane commissioner that they will start crushing operations soon. After threatening to suspend crushing operations in 2014-15, sugar mills in the state have agreed to start maintenance work following a promise from the state government to address their concerns, mainly the demand for a pricing formula for cane linking the rate of the raw material with that of sugar and other by-products.

Some cooperative and private-owned mills in western UP will start crushing operations from November 10, while others will start factories from the third week of November, said UP cane commissioner Subhash Chand. As many as 119 mills are likely to operate in the state this year and harvesting in some parts have been delayed due to rains following cyclone 'Hudhud', he said.

The Indian Sugar Mills Association (ISMA), too, has forecast production at 25-25.50 million tonne for 2014-15. Maharashtra is expected to produce 9.1 million tonne, followed by UP (6.2 million tonne) and Karnataka (4.25 million tonne).

In southern Karnataka, about 14 mills have already started crushing operations and others will start this week, a senior state government official said. Sugar stocks by the end of 2013-14 were 6.92 million tonne, the Centre said, pegging them below ISMA's estimate of 7.4 million tonne.

Last month, ISMA said among key states, while Maharashtra and Karnataka would produce more than 2013-14 levels, Uttar Pradesh and Tamil Nadu would produce less. An 11% rise in cane acreage in Maharashtra, where both yield and the recovery rate are much higher than Uttar Pradesh as well as most other states, is the biggest driver of the potential increase in the country's production.

According to the ISMA estimate, while Maharashtra is expected to produce around 9.3 million tonne in 2014-15, around 20% higher than 2013-14, UP could witness an 8% drop at about 6 million tonne. Output in Karnataka could rise to 4.45 million tonne, up 7% from a year before, the association had said.