Weak rains but sugar prod to be balanced: Balrampur Chini

In an interview with CNBC-TV18, Vivek Saraogi, MD of Balrampur Chini sounded hopeful on the policy front, about rational cane pricing and other issues related to sugarcane production in UP.

Although, rainfall has been deficient in most parts of the country, Saraogi said, it is just perfect in east UP. However, according to an estimate by the Indian Sugar Mills Association (ISMA), production could be close to 25 million, he informed. He is quite optimistic about production and feels that even if the bad monsoon affects states like Karnataka and Maharashtra, where production could be lower by 20%, it will not lead to a huge mismatch in the demand-supply equation. Rather, it will be much more balanced this year.

Below is the edited transcript of the interview on CNBC-TV18.

Q: Before we talk about the situation that stands in terms of demand-supply, there has been a lot of talk that the UP government maybe considering some kind of a special package for the UP sugar companies. Is that going anywhere? Are you expecting to see something like that?

A: We are hopeful about UP, we are hopeful on a lot of fronts - policy, rational cane pricing in future and overall, we are hopeful about UP.

Q: Things like sugarcane procurement tax, a transportation subsidy have also been reported, any movement along those lines that you are expecting?

A: We have been writing for this. We have been saying that there are a lot of cane areas now and the receivables on this policy and the cane areas match. So there have been a lot of representations. We have been trying our best and we are hopeful about all these fronts including what you just said.

Q: How bad is the production situation this time around because of monsoon etc? We believe in Maharashtra, Karnataka the crop is affected. By how much can production dip you think?

A: I think Maharashtra, Karnataka is affected. In UP, I can definitely vouch for my part of UP which will be east UP. East UP rainfall is just perfect until now. In Maharashtra, Karnataka I am told, it could be 20% lower. Having said that, we still feel that in our last meeting we did a production estimate closer to 25 million. But, it is too early.