Sugar industry expects to bounce back after price rise, govt measures

Tamil Nadu mills in the red still, seek financial package and loan relief.

The surge in sugar prices follows the central government’s announcements to support the industry weeks before the crushing season few weeks away.

The expected decline in 2019-20 sugar production coupled with the announcement on creation of 4 million tonnes (MT) of sugar buffer stock and subsidy on 6 MT sugar exports resulted in sugar prices rising to Rs 34-34.5/kg (ex-mill Uttar Pradesh), according to a report by rating agency ICRA. Sugarcane is Rs 31.8/32 per kg in Maharashtra against the minimum selling price of Rs 31.

The ICRA raid the government’s measures were likely to result in improvement in liquidity