Sugar production for the season 2008-09 is expected to fall around 14% to 21.7 million tonne, as there could be a shift in acreage from sugarcane to other crops, a trade source said. The next season may start with marginal higher opening stocks of 9.85 million tonne. Total supply would be around 32.04 million for the season 2008-09, down from 35.40 million tonne in 2007-08.
?In my opinion, there could be a shift in acreage from sugarcane to other crops. The sugar production for the season 2008-09 is expected to fall around 14% to 21.7 million tonne. On the backdrop of a lower crop, sugar prices for the season 2008-09 could stay firm. The industry may opt for white sugar production only,? Praful Vithalani, a leading sugar dealer and director of Bombay Sugar Merchants Association said.
During 2007-08, total exports can reach to 3.5 million tonne, which includes raw, white, and refined sugar. ?Exports are likely to the tune of 1 million tonne, only if the price realisation is available more than $350 FOB,? he said.
There is a possibility that the country may import sugar for the year 2009-10 sugar season, as carry-over stocks are expected to be available for 4 months of consumption only. Total releases declared on April 1, 2008 that allows sugar mills to sell 2 million tonne any time between May to September 2008, is the first step by the government towards de-control.
For sugar de-control, the government may discontinue the 10% levy mechanism, which will result in the industry having the liberty to sell the entire quantum of sugar in the domestic market or go for exports as per the liberalised release mechanism.