India's sugar output could fall 2.4% or more this season if standoff between millers and farmers over prices delays start of cane crushing for another 10 days, says government and main industry association

KARACHI, Pakistan , November 29, 2013 () – India's sugar output could slip 2.4 per cent or more this season if a standoff between millers and farmers over prices delays the start of cane crushing for a further 10 days, according to the government and the main industry association. India's mills normally start crushing cane around Nov. 1 but most are still idle this year as farmers hold out for higher cane prices and millers say they cannot afford to pay because domestic sugar prices are so low. While stocks remain comfortable and output is still likely to exceed demand, the slide could crimp exports from the world's second-biggest producer and give some support to sagging global and domestic prices . The delay in crushing already means India's sugar production could slip 2.4 per cent to 24.4 million tonnes in the year to September 2014, Food Minister K.V. Thomas said. Abinash Verma, director general of the Indian Sugar Mills' Association, added it could be cut even more if crushing is delayed by another 10 days. Production would still exceed estimated annual demand of about 23 million tonnes. Also, with nearly 8 million tonnes of carryover stocks from the previous season,India does not have to resort to imports. Buying on global markets by India after a severe drought in 2009 pushed prices to record highs. "This is a question of the survival of mills and it will be suicidal for companies to operate at the current cane price," Verma told reporters. Uttar Pradesh state, the country's biggest cane producer, has set a cane price of 280 rupees ($4.50) per 100 kg, unchanged from last year. Domestic ex-mill sugarprices have fallen 8 per cent to 2,900 rupees per 100 kg. "Mills are in deep losses because in the past three years cane prices have risen 70 per cent, while sugar prices have gone up by only 8 per cent," Verma said. He said the government must link cane prices with that of sugar, as recommended by R. Rangarajan, the prime minister's economic adviser, who suggests that 70 per cent of prices realised from sugar and sugar products to be given to cane growers. Worried over the delay, the Utter Pradesh state government has told mills to start crushing by Dec. 7 or face legal action Published by HT Syndication with permission from South Asian Media Network. For any query with respect to this article or any other content requirement, please contact Editor at htsyndication@hindustantimes.com

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