Published on Fri, Nov 20, 2009 at 13:38 | Source : Reuters
Updated at Fri, Nov 20, 2009 at 14:07
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Cane crush delay in Uttar Pradesh to hit supply
Delay in sugarcane crushing in India's biggest cane producing state threatens to aggravate sugar shortage, increasing the country's dependence on expensive imports.
Farm Minister Sharad Pawar early this month said India would consume up to 7 million tonnes more sugar than it would produce in 2009/10 and the imported raw sugar being processed in the new season would not be enough to bridge the deficit.
India's sugar year runs from October to September.
Analysts, who expect the country to import 2-3 million tonnes more, say purchases would largely depend on output in the year to September 2010.
The US Department of Agriculture on Thursday forecast India's sugar output at 17.3 million tonnes in 2009/10, while industry and government officials see production at 16 million tonnes, largely due to fall in cane area in UP.
Lower cane production clipped sugar output by 43% to 15 million tonnes in 2008/09, prompting the government to abolish import tax on sugar in early 2009.
"Sixteen million tonnes will not be enough. To add to our woes, delay in crushing in UP has squeezed supplies further," said said Veeresh Hiremath, a senior analyst with commodity brokerage Karvy Comtrade.
About six of 150 sugar mills in the state have started crushing cane, said C.B. Patodia, chairman of the Uttar Pradesh Sugar Mills Association.
"We believe the issue will be resolved soon and expect crushing to gain momentum in 3 to 4 days," he said.
