Sugar production in FY13 likely to be at 25 MT: Rabobank

MDT/PTI 18 September 2012

Concerns regarding the prospect of lower cane yields and sugar output in Maharashtra and Karnataka and the approaching peak sugar consumption period have led to retail prices of sugar going up by 15% over the last month says Rabobank, which specialises in agri-business

Mumbai: Sugar production for 2012-13 is expected to be at around 25 million tonnes (MT) against 26 MT last year while consumption is forecast at about 23 MT, reports PTI quoting a sugar quarterly review by Rabobank.

Monsoon rains have been 12% below normal as of end-August and though most of the cane producing regions are irrigated, dry weather is expected to impact the cane crop as irrigation from existing water reservoirs cannot offset the deficit in rainfall, the bank which specialises in agri business said.

Commenting on the domestic market, it said production in Maharashtra and Karnataka is likely to decline though the shortfall would be offset by increase in production in Uttar Pradesh and Tamil Nadu.

Maharashtra's sugar production is projected to decline by 15% to 7.6 MT in 2012-13 as against 8.9 MT in 2011-12 due to deficit rainfall and that in Karnataka by 21% to 3 MT.

Production in Uttar Pradesh, however, is expected to increase by 12% to 7.8 MT and that in Tamil Nadu by around 11% to about 2.3 MT, Rabobank said.

Concerns regarding the prospect of lower cane yields and sugar output in Maharashtra and Karnataka plus the approach of the peak sugar consumption period have led to retail prices of sugar going up by 15% over the last month, it said.

Retail sugar prices in Delhi and Mumbai are currently around Rs40 per kg, the highest in 18 months and 25% above year-ago levels, the bank said.

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