With supply set to outstrip the annual demand by a wide margin, domestic sugar prices will fall further landing mills into liquidity crisis in 2010-11, the apex body of sugar cooperatives said today.
"India's sugar production is estimated to be around 250 lakh tonnes. With around 50 lakh tonnes of carry over stock of sugar from 2009-10 season, India will have an availability of around 300 lakh tonnes of sugar during 2010-11 against a requirement of 225-230 lakh tonnes for domestic consumption," National Federation of Cooperative Sugar Factories (NFCSF) President Jayantilal Patel said here.
"Evidently, 2010-11 is going to be an year of surplus availability of sugar. Ironically this is a worrying factor for the sugar factories because as per past experience surplus availability of sugar leads to fall in sugar prices and lands the sugar factories into liquidity crisis," he added.
According to government estimates, India is likely to produce 240 lakh tonnes of sugar in 2010-11 year starting next month. The country had produced 190.2 lakh tonnes of sugar in the last season.
The retail price of sugar had skyrocketed to around Rs 50 a kg in the national capital region in early January this year. However, the rates are ruling at around Rs 30 a kg with the prospect of better availability of the sweetener.
According to the first advance estimate, sugarcane production is expected to rise by 17 per cent to 3,249 lakh tonnes in the 2010-11 crop year.
