India's sugar production fell by 15 per cent to 14.67 million tonnes so far in the 2016-17 marketing year that started in October last due to lower cane output in Maharashtra and Karnataka on account of drought.
The Indian Sugar Mills Association (ISMA) had last month revised sugar production estimates downward to 21.3 million tonnes in the 2016-17 marketing year (October-September) from its earlier projection of 23.4 million tonnes.
Sugar production of India, the world's second largest producer after Brazil but the biggest consumer, stood at 25.1 million tonnes in the 2015-16 marketing year.
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On the demand, ISMA said sugar sold by mills across the country from October 2016 to January 2017 have declined by 0.75 million tonnes compared with the corresponding period of the 2015-16 marketing year.
"The trend of lower sales noticed from October 2016 has continued even in January 2017. One has to wait to see whether the trend of lower off-take will continue or get reversed in February 2017," ISMA said.
According to the ISMA data released today, sugar output dropped to 14.67 million tonnes as on February 15, 2017 of the 2016-17 marketing year from 17.33 million tonnes in the year- ago period.
"Of the 483 sugar mills that started crushing operations in 2016-17 sugar season, 191 mills have closed their operations. About 80 per cent of the mills in Maharashtra and 95 per cent of mills in Karnataka have closed," ISMA said in a statement.
Uttar Pradesh, which is set to become the largest sugar producing state, produced 5.4 million tonnes till February 15 as against 4.55 million tonnes in the same period of 2015-16 marketing year.
Sugar production in Maharashtra declined to 3.97 million tonnes till February 15, 2017 as compared with 6.27 million tonnes produced in corresponding period of last season due to lack of sugarcane because of drought.
Mills in Karnataka have produced 2.02 million tonnes of sugar as on February 15, 2017, as compared with 3.23 million tonnes in the year-ago period.
Further, the association also estimated that sugar sales could fall to 24-24.3 million tonnes in 2016-17 from 24.85 million tonnes during the 2015-16 marketing year.
"Current retail prices of sugar, as per website of Ministry of Consumer Affairs, are on an average Rs 42 per kg for the country as a whole.
"The ex-mill sugar prices have witnessed a fall in the last few days, mainly because of lack of off-take and poor demand. Currently, ex-mill prices in North India is around Rs 37 per kg and in South and West India is around Rs 36 per kg," ISMA said.
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