Sugar production to drop 6%-8%

Sugar production in India would decline 6%-8% to around 24-24.5 million tonnes (MT) in the 2012-13 sugar season (October-September) due to weak and delayed monsoons in several key growing states.

While Maharashtra has witnessed the largest decline followed by Northern Karnataka, Uttar Pradesh is likely to witness growth in production because of higher sowing in previous seasons and more favourable weather conditions, analysts tracking the sector said.

Domestic consumption of sugar would be about 23-23.5 MT in 2012-13, estimates made by ratings agency ICRA showed. The industry would have around 5.5-6 MT of sugar as stock or the equivalent of three months’ consumption.

Sugar prices would increase by Rs. 1000- 2000 per MT in the second half of the current season. But larger sales following decontrol by cash-strapped sugar mills would exert temporary pressure on such increases, ICRA stated.

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