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HomeNewsOpinionHigher sugarcane crop in India & Brazil to hurt sugar companies for some time now

Higher sugarcane crop in India & Brazil to hurt sugar companies for some time now

According to a report by ICRA, the domestic sugar production for the sugar year 2018 is likely to increase by 23 percent to around 25.0 million tonnes, driven principally by a recovery in production across India.

December 20, 2017 / 18:59 IST
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Shishir Asthana Moneycontrol Research

Government’s move of controlling sugar price by imposing stock-holding and turnover limits on sugar dealers has worked. With a bumper crop expected in the current sugar crushing season prices of sugar have already started to move southwards.

The stockholding and turnover limits were imposed to check hoarding by unscrupulous traders who increase prices by creating artificial scarcity in the market. On account of two consecutive years of lower sugar production the government had taken various steps to control sugar prices. The stock holding and turnover limit were imposed until December this year.

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Reports say that domestic ex-mill realisations have fallen to Rs 32 per kg as compared to Rs 36-38 per kg at the beginning of the season.

India is the second largest producer of sugar in the world and is expected to crush 249 lakh tonnes of sugarcane in the 2017-18 marketing year (October-September) as compared to 203 lakh tonnes in the previous year. According to a Food Ministry statement "During the current sugar season 2017-18, crushing operations in all major sugar producing states has commenced smoothly. The total sugar production is estimated to be around 249 lakh tonnes by the end of the season against estimated consumption requirement of about 250 lakh tonnes. With the carryover stock, the ministry said the total availability of sugar is sufficient to meet the estimated domestic demand."