Sugar

India is likely to witness surplus sugar production during the next two years on account of a bumper sugarcane crop. According to OP Dhanuka, CMD, Riga Sugar Company Ltd, production of sugar in 2017-18 marketing year (October-September) is likely to be close to 25.5 million tonnes (mt), a growth of 25 per cent over last year on higher sugarcane area. The country’s annual consumption is pegged at 24 mt. It is estimated that the area under sugarcane cultivation is higher at 49.88-lakh hectares this year compared to 45.64-lakh hectares in 2016-17.

On the back of higher sugarcane acreage this year and record sugarcane payments during 2016-17 crushing season, Uttar Pradesh government has projected sugar production of almost 10 MT in the coming season. This would be almost 15 percent higher compared to sugar production of about 8.75 MT during 2016-17 and total sugarcane payables of Rs 25,386 crore last year. During 2017-18 season, we are confident UP sugar output would touch the record level of a crore tonnes (10 MT).

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U.P. govt eyeing 10 MMT of sugar production.

Encouraged by a sharp increase in realisation through last year, jaggery manufacturing units (termed kolhus) say they’re equipped for a price battle with sugar mills on sugarcane purchase. Sugar mills in Uttar Pradesh and Maharashtra, the top two producing states, have announced an early start to crushing this year (the sugar season begins October 1). This was reportedly to get the early variety of cane, normally supplied to kolhus. Jaggery makers traditionally start their operations in September with this early variety, which offers lower yield than the matured type. Crushing of this type of cane, therefore, becomes uneconomical for sugar mills.

Sugar prices settled quiet at the wholesale market in the national capital on sporadic buying support amid adequate stocks availability. Besides scattered buying by stockists and retailers, sufficient position of stocks in the market, kept the sweetener’s prices unaltered.

Consumer prices of sugar are projected to reduce substantially on increased supplies in the global market after the European Union (EU) formally scrapped quotas on the production and sale of the commodity after nearly 50 years. The end of the quotas means that there are no further limits to production or exports, allowing production to adjust to market demand both within and outside the EU. Producers will now have the opportunity to expand their trade on global markets,” Phil Hogan, EU Commissioner for Agriculture and Rural Development, said in a statement following the close of production quotas on September 30. European Commission showed the end of the system will trigger a jump in sugar production. It said that between 2016 and 2026 the bloc’s sugar production will increase by six per cent while production of an alternative sweetener, Isoglucose, could triple from 700,000 tonnes to 2.3 million tonnes. Imports will, on the other hand, continue to drop from 3 to 3.5 million to 1.8 million tonnes and exports are expected to increase from 1.3 million tonnes to 2.5 million tonnes. For the upcoming harvest, no longer bound by the limitations of the quota, an increase in production of roughly 20 per cent (20.1 million tonnes) is expected. This increase results from both an increase in area and higher yields because of good climatic conditions.

The import of raw sugar at 25% duty has become unviable for millers due to the recent weakness of rupee against the US dollar. The government had, on Sep 8, allowed sugar mills and refineries to import 0.3 MMT raw sugar under tariff rate quota at a concessional duty of 25% for a period of 60 days in a bid to tide over any shortages in the run-up to Diwali. Importing sugar was viable when the government had issued a notification allowing imports.

Don’t increase cane prices, U.P. sugar mills appeal to govt.

Europe on the brink of sugar deluge as quotas end.

India’s sugar production will rise to between 28.5 and 30 MMT in 2018/19, said director general of the Indian Sugar Mills Association (ISMA).

Sugar prices moved up in futures market today as speculators built up fresh positions, driven by pick up in demand in the spot market. Fresh positions created by participants on the back of pick up in demand in the physical market amid pause in supplies, mainly influenced sugar prices at futures trade.

The government has reallocated the raw sugar import quota of 92,000 tonnes surrendered by a dozen South Indian mills and the shipments are expected from mid-October onwards. On September 7, the government had allowed import of 3,00,000 tonnes of raw sugar at a concessional 25 per cent import duty to boost supply in southern India. The import quota was allocated to only southern mills. Otherwise, the import duty on sugar is 50 per cent. Around 41 mills showed interest to import. We allocated the raw sugar import quota of 3 lakh tonnes as per the rule. But 11-12 mills surrendered 92,000 tonnes, saying it is not viable. We have reallocated that quantity now . Global prices of sugar are still comfortable to import and some mills have placed orders and shipments will start arriving from mid-October, he said and added that imports have been allowed to those mills/refiners that have their own capacity to convert raw sugar into refined one.

Barely three weeks before the 2017-18 sugarcane crushing gets underway in Uttar Pradesh, the country’s largest sugar producer, the state sugar mills, which are predominantly private sector owned, have arrears to tune of Rs 1,130 crore pertaining to the previous 2016-17 season. Of the outstanding amount, the private millers owe the bulk at almost Rs 945 crore, or 84 per cent of the consolidated arrears. The remaining Rs 185 crore is due from the state co-operative federation units. Settlement of arrears within 14 days of sale was a prominent pre-poll promise of the Bharatiya Janata Party (BJP) government in the run up to the UP 2017 Assembly elections. The 2016-17 crushing season had wrapped up by the first week of May 2017. Although five months have passed, yet the arrears have still not been settled in total.

Sugar mills in Uttar Pradesh have requested the State government not to increase the prices at which sugarcane is purchased from farmers this year. In a letter written to the Chief Secretary of the State, the U.P. Sugar Mills Association (UPSMA) said that any increase in cane prices would hit them hard “as the cane industry has been going through losses for last three consecutive years. The request comes days after distressed farmers of the State alleged that the present rate of Rs. 305 per quintal of cane was much lower than the total input cost that goes into the farming of cane in U.P. Farmers have waged a campaign to increase the State Advised Price (SAP) to ?400 per quintal. Uttar Pradesh became the highest producer of sugar last year, contributing close to 42% of the total sugar production in India.

Europe is about to get a lot sweeter. After a decade of quotas, sugar firms in the European Union can now produce and export as much as they want. Companies such as France’s Tereos and Germany’s Suedzucker AG have been ramping up operations to get ready for the change, which will help fuel a global sugar glut. The scrapping of quotas may also lead to major changes in the global sugar trade. With increased EU production, there will be less need to import supplies from places like Africa and the Caribbean. While the industry has been readying for the change for years, it may further pressure prices that have dropped 28 percent in 2017, the worst performance in a Bloomberg index of 22 commodities. In the EU, the sugar-beet harvest is now in full swing and tests are showing higher-than-average yields in France and Germany, the region’s top growers.