India’s sugar production would scale an eight-year high of 26.5 million tonne in the current marketing year through September, according to the latest estimate of the food ministry. The ministry has revised up its estimate of sugar production for 2014-15 from 25-25.5 million tonne on higher-than-expected production in Uttar Pradesh and Maharashtra, sources said on Tuesday.
India, the world’s second-largest producer and biggest consumer, had produced 24.3 million tonne in 2013-14 and 25.2 million tonne a year before. The production is estimated to be the highest since that of 28.4 million tonne in 2006-07.
Industry executives say higher-than-expected production has further aggravated a glut in the market and continues to pressure ex-factory sugar prices which are already at multi-year lows across producing reasons.
The market has already been awash with supp-lies, thanks to the fifth straight year of surplus sugar production through 2014-15.
Consumption of the sweetener is expected to be 24.8 million tonne in 2014-15, compared with 24 million tonne a year before.
“With higher estimations of the sugar production by the government by 1.5 million tonne and lower expected raw sugar exports, the industry has requested for creation of buffer stocks of two million tonne. It will help the industry with some cash flows to carry the extra sugar and will check distress sales by some sugar mills. These two million tonne of buffer stocks can then be used by the government next season for its PDS requirements,” said Indian Sugar Mills Association director general Abinash Verma.
Sugar output up 14% till March 15 The country’s sugar production rose 14.4% until mid-March since the current season started on October 1, according to the Isma data.
Mills across states produced 22.18 million tonne of sugar up to March 15, compared with 19.38 million tonne a year before, the data showed.
Maharashtra produced 8.41 million tonne between October 1 and March 15, against 6.41 million tonne a year earlier, while Uttar Pradesh produced 5.63 million tonne, compared with 5.07 million tonne in the corresponding period last season.
Karnataka witnessed a rise in production to 3.8 million tonne up to March 15, against 3.45 million tonne a year earlier.
Mills in the other states have produced a total of 4.35 million tonne until March 15 this season, compared with 4.45 million tonne a year before.