Sugar production in India for 2011 may touch 25 million tonne (mt) over the expected 17 mt this year on the back of increased planting.
GSC Rao, president, Sugar Technologist Association of India and CEO, Simbhaoli Sugars, said, “We may see sugar plantings go up by 20-25% next year and production may touch 25 mt.” Current year ending September 2010, the industry is expecting India to produce 17 mt from the earlier estimate of 14.5 mt.
Sanjay Taparia, CFO, Simbhaoli Sugars, said, “Brazil is likely to produce 34 mt of sugar as against the earlier projection of 31 mt, a jump of 10% for the current year.”
Rao said due to the increased production estimates for the current and following year India may not see much of sugar imports. He said, “Imports depend on the final projection but it will definitely reduce and may also become near zero.” Taparia said, “Definitely there is still room for some import of raw sugar.”
An analyst tracking the sector said, “Inventories globally are very low so we expect the demand will definitely be there as countries would want to maintain a certain level of sugar inventory. This demand could support prices.”
Taparia said although prices have come down 35% from peak, there has been a marginal uptick in sugar prices over the past two days.
The analyst said, “Prices have definitely bottomed out but we will see some increase in price as there is still sugar deficit in the country.”
Rao said, “Currently, sugar prices in northern India are ruling at Rs 32 per kg and we may see an improvement of Rs 2-3 per kg once the crushing season ends next month.”
“Currently, the landed cost of sugar is around $540 per tonne and may be seen in a range of $540-600 per tonne,” the analyst said, adding that at $540 per tonne it comes to Rs 30 per kg.
Comments