Sugar

The government is expecting about 24 per cent increase in the country’s total sugar output to around 25 million tonnes in the marketing year beginning next month on likely higher output in Uttar Pradesh and Maharashtra following good rains. This is an initial projection based on the inputs of the state governments. The country’s sugar output in the ongoing 2016-17 marketing year (October-September) is estimated to be lower at 20.2 million tonnes because of poor rains. India is the world’s second biggest sugar producer. In a meeting with state cane commissioners called by the Union Food Ministry, official sources said state governments have submitted the sugar production figures after assessing the likely sugarcane output and recovery level. Based on their inputs, the country’s overall sugar output is expected to be around 25 million tonnes in 2017-18 marketing year,

India spot sugar prices down on selling pressure.

Owing to a sugar shortage in the country, the government had planned to start the crushing of sugarcane ahead of the normal schedule- before Diwali (October 19)- but the delay in the monsoon’s retreat has put paid to this plan. According to the sugar industry, heavy rains are again expected in October in Karnataka and Maharashtra- states where the cane crushing starts first- due to the lingering monsoon. It means labourers cannot access the cane fields as they will be muddy during this period. The National Federation of Cooperative Sugar Factories (NFCSF) has said that the crushing could start from November. There is heavy rain in Karnataka and Maharashtra. Its occurrence in October also will make it impossible for labourers to go into the fields. Due to this, the crushing work is expected to start only in November. However, in case the monsoon recedes completely by mid-October, crushing might start in Karnataka after Diwali. Due to the delay in the monsoon’s retreat, Maharashtra has decided to postpone the cane crushing to November 1.

Sugarcane price fixation sparks row between farmers, millers in Uttar Pradesh.

The prices of sugar fell in the key wholesale markets of the country on Thursday amid increased selling pressure on mills. Prices of medium-grade sugar down rs 5 in the markets of Delhi and Muzaffarnagar, and rs 10 per 100 kg lower in Mumbai and Kolhapur. Millers are quoting lower prices as there is no demand at current price levels despite it being the festival season. Mills also have to adhere to stock limits. The government has imposed stock holding limits on sugar mills for September and October to keep prices in check ahead of major festivals. Sugar mills can hold up to 21 per cent of the total sugar supply of the 201617(October-September) season as of the end of September, and 8 per cent of the supply as of the end of October. Demand for the sweetener has been low since the beginning of the month. Some sugar mills in western Uttar Pradesh are likely to begin cane crushing for 201718 (October-September) on October 10.

Sugar Prices fall on rain forecast for Brazil.

With less than a month remaining for sugarcane crushing to begin in the new season, it’s time for the annual ritual of confrontation between farmers and private millers in Uttar Pradesh on the issue of price to be paid to cane growers. As every year, both the stakeholders hold diametrically opposite views on what should be the “right price” that the farmer should get for his produce. At a meeting of the cane price fixation committee under the chairmanship of Uttar Pradesh chief secretary, the farmers demanded Rs 375-400/quintal while the millers categorically stated that they are in no condition to pay anything beyond last year’s State Advised Price (SAP) of Rs 305 per quintal.

Sugar prices fell Monday amid expectations for greater rain in Brazil in the coming days, adding to concerns about a global glut of the sweetener. Raw sugar for October delivery dropped 1% to 13.84 cents a pound on the ICE Futures U.S. exchange. The precipitation will begin as isolated to scattered showers during the early to middle part of this week and then increase.

Prices of sugar fell in the key wholesale markets of Mumbai and Muzaffarnagar due to poor demand for the commodity. Festival demand is also not expected currently as most people fast during Navratri. However, there might be a rise in demand during Dussehra. Selling pressure among mills due to the stock limit of 21% also weighed on prices.

Sugar prices are likely to range between Rs 45 and Rs 50 per kg in the retail markets during the festive season as major sugarcane cultivating states, Maharashtra and Uttar Pradesh, start the crushing season only from November 1. At a meeting of the committee of ministers in charge of co-operatives in Maharashtra, it was decided that the state would also join Uttar Pradesh in delaying the start of the crushing season. The Maharashtra government had asked the central government to provide a subsidy of Rs 500 per tonne of sugarcane crushed in the month of October on the grounds that the cane harvested early would have less sucrose content.

Kingsman has scaled down its forecast for sugar production in Brazil largest cane growing Centre-South region by 300,000 tonne to 36.1 million tonne in 2017-18. Production in the region accounts for more than 90% of the country’s sugar output. sugar output would represent a fall of 2.1 million tonne on year, and would be the lowest since the 31.22 million tonne produced in 2015-16. Sugar production in Centre-South Brazil is seen declining in 2018-19 to 34 million tonne due to an ongoing drought. Kingsman also lowered its global sugar surplus forecast for 2017-18 by 1 million tonne to 3.87 million tonne due to damage to the crop from hurricanes in Cuba.

Sugar mills in Maharashtra have decided to start cane crushing operations for the 2017-18 (Oct-Sep) season from Nov 1, putting to rest speculation about an early start to crushing operations. Among other decisions, the state pursue restructuring of 61 billion rupees worth of outstanding loans of 90 cooperative sugar mills with the Centre. The ban on export of sugarcane may have been taken in the wake of sharp fall in output in the neighboring north Karnataka. Also, Maharashtra wants to raise the longevity of crushing season with an intention to raise the output. The state government expects to crush over 65 million tonne of sugarcane to produce 7.3 million tonne sugar in the year starting Oct 1. This year, sugar output was at 4.2 million tonne.

The prices of sugar fell in the key wholesale markets of the country amid increased selling pressure on mills. Millers are quoting lower prices as there is no demand at current price levels despite it being the festival season. Mills also have to adhere to stock limits. Demand for the sweetener has been low since the beginning of the month. There is only hand-to-mouth demand as crushing season is nearing and there is fear of government action in case prices rise.

Dwarikesh Sugar Industries expects a 15 per cent increase in production leading to higher revenues during the forthcoming crushing season. If the weather holds, the plants located in Bijnor and Bareilly (UP) would better the recovery rates. If not, at least sustain similar rates. The firm total and net revenues increased by 70 per cent from ₹306.1 crore and ₹289.7 crore in the first quarter of fiscal 2017 to ₹522 crores and ₹493.6 crore, respectively, in the first quarter of fiscal 2018.

The cash premium for Thailand’s refined sugar surged to a six-year high this week as near-term supply tightness sent buyers in the Asia Pacific region scrambling for cargoes. The rise started in mid-July when more cargoes were shipped to Taiwan with a subsequent increase in flows to China as Taiwan replaced Myanmar as the destination for illegal sugar shipments. A total of 295,067 mt of Thai white sugar were shipped to Taiwan in the three months to August. This compared with 141,738 mt during the same period to Myanmar. But as demand from Taiwan became consistent, it was the near-term supply tightness that further supported the cash premium.

Brazil Center/South (CS) mills might cut sugar production between 500,000 and 1 million tonnes this crop compared with the previously projected 34 million as a result of higher ethanol output.

Sugar production in Brazil key Centre South region drop to a three-year low next season as a dearth of replanting takes its toll on cane yields, and with ethanol raising its take of the harvest. Kingsman pegged sugar output in the Centre South, which is responsible for more than 90% of output in the top producing country, at 33.99m tonnes for 2018-19, on an April-to-March basis. Sugar output at that level would represent a fall of 2.1m tonnes year on year, and would be the lowest since the 31.22m tonnes produced in 2015-16. The decline would represent a double whammy of a lower cane crush, seen dropping to a four-year low of 575.0m tonnes, and a lower proportion of cane being processed into sugar rather than ethanol.

Prices of sugar fell in the key markets of Maharashtra due to sluggish demand from bulk buyers. Buyers stayed away from the markets due to heavy rainfall in the region, pulling down prices of the sweetener. In the key wholesale markets of north India, however, prices were largely stable due to lacklustre trade. There is only hand-to-mouth demand as crushing season is nearing and there is fear of government action in case prices rise.