Sugar production is likely to be lower at 23.5 - 24.5 million tonnes than the industry's estimate of 25 million tonnes in 2012-13 marketing year starting October, sugar refiner Shree Renuka Sugars has said.
Taking into account the likely impact of poor rains on sugarcane yield, especially in Maharashtra and Karnataka, Indian Sugar Mills Association (ISMA) had recently made an initial production estimate of 25 million tonnes for 2012-13, lower than 26 million tonnes for 2011-12.
"Sugar production is expected between 23.5 million tonnes and 24.5 million tonnes in 2012-13 marketing year," Shree Renuka Sugars said in its quarterly earning presentation.
Although area covered under sugarcane so far is slighly higher at 5.28 million hectare, against 5.05 million hectare in the same period last year, drought-like situation in Karnataka and Maharashtra is expected to hit sugarcane crop.
As per the Indian Meteological Department, monsoon rain is deficient by 15 per cent so far in the country.
Renuka Sugars said that sugar production in the ongoing 2011-12 marketing year is estimated to be 26 million tonnes, as against 24.2 million tonnes in the previous year.
India has been a net exporter for the last two marketing years backed by robust sugarcane cultivation and favourable weather.
Stating that domestic sugar prices are higher than world white sugar prices, Renuka Sugars said, "The company will benefit from the increased prices in the coming quarters."
The company reported a standalone net profit of Rs 13.3 crore for the quarter ended June 30, 2012. Net sales grew by 23 per cent at Rs 1,483.9 crore in the same period.
Renuka Sugars operates 11 mills globally with a total crushing capacity of 20.7 million tonnes per annum (MTPA). Of which, seven sugar mills are in India with a total crushing capacity of 7.1 MTPA.