India’s sugar output may miss forecast, hit global market more

India’s sugar output may miss forecast, hit global market more
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First Published: Fri, Jan 16 2009. 09 21 PM IST
Updated: Fri, Jan 16 2009. 09 21 PM IST
New Delhi: India, the world’s second biggest sugar maker, may produce 1.2 million tonnes (mt) less this year than forecast last month because of lower yields in Maharashtra, the main cane growing state. This is likely to tighten global supplies.
Production in the year ending 30 September may total 18mt, compared with 19.2mt forecast in December, S.L. Jain, director general of the Indian Sugar Mills Association, said in an interview on Friday.
Lower Indian output may widen a global deficit forecast at 5.8mt in the 2008-09 season by Czarnikow Group Ltd, supporting prices in New York that have risen 9% in the past three weeks. India may permit duty-free imports of raw sugar to boost domestic supplies, agriculture minister Sharad Pawar said this week. This will have a positive impact on global prices as the shortage will lead to imports, said Harish Galipelli, head of research at Karvy Comtrade in Hyderabad.
Raw sugar futures for March delivery gained as much as 1.8% to 12.18 cents a pound (Rs19.47 a kg) in after-hours trading on ICE Futures US, the highest since 6 January. Sugar was the second biggest gainer in 2008 on the Reuters/Jefferies CRB Index.
Sugar mills’ shares rose in Mumbai trading. Bajaj Hindusthan Ltd, India’s biggest sugar maker, gained 7.6% to Rs59.5, the most this year. Balarampur Chini Ltd, the second biggest, added 7.9% to Rs54. Shree Renuka Sugars Ltd climbed 8% to Rs71.95, the most since 12 December.
Production may total 20mt in year to September, down from 26.4mt a year ago, Pawar said last month.
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First Published: Fri, Jan 16 2009. 09 21 PM IST