Sugar output up 45% at 27mt

The country's sugar production in the October-May period of the 2006-07 sugar season (October-September) reached 27 million tonnes, 45 per cent up over 18.6 million tonnes recorded in the year-ago period.

Industry associations are certain of the production crossing 28 mt. This is 5 mt over the preliminary estimate of 23 mt. According to the data compiled by the National Federation of Cooperative Sugar Factories (NFCSF), a body of cooperative sugar millers, the country's sugar production was 27 mt as on May 31.

Maharashtra replaced Uttar Pradesh as the leading sugar-producing state in the country after a gap of three years. As on May 31, Maharashtra had produced 8.92 mt of the sweetener, 0.42 mt more than Uttar Pradesh's 8.5 mt. Last year, Uttar Pradesh had produced 5.78 mt, while Maharashtra had produced 5.19 mt. In 2002-03, Maharashtra had overtaken Uttar Pradesh, with the former recording 6.21 mt and the latter registering 5.65 mt. After Maharashtra and Uttar Pradesh, Karnataka occupies the third slot this year with a production of 2.46 mt as on May 31.

"We expect the production to cross 28 mt this year as crushing of sugarcane is still on in some regions of Uttar Pradesh and Maharashtra," said Vinay Kumar, managing director of NFCSF. Last year, the country recorded a total production of 19.2 mt.

However, the bumper production has created a negative sentiment, with the sugar prices continuing to fall. With the country's consumption at 19.5 mt, the industry does not see exports crossing beyond 1.5 mt. The year is likely to end with a surplus of 7-8 mt.

The projected surplus has prompted the government to consider raising the buffer stock from 2 mt to 5 mt. It is also considering some excise duty relief to bail out the loss-making industry.