OfBusiness Sugar Dailies | 8th July 2023

Price

• The rate in areas of Haryana was high in a few areas and down in some of the areas.
• The prices in Mumbai, Kolkata, and Raipur remained stable.
• In Kolkata, the rate ranged between Rs.3870-4070/quintal, while in Raipur, it ranged between Rs.3860-3930/quintal.
• The rate in areas of eastern, western, and central zones of Uttar Pradesh remained stable.
• The current price range in these regions is between Rs.3570-3725/quintal.
• The rate in areas of Karnataka is down by Rs.10-20/quintal.
• The rate in areas of Gujarat is down by Rs.10/quintal ranging between Rs.3500-3731/quintal.
• In Madhya Pradesh, the rate in areas was down by Rs.10/quintal ranging between Rs.3670-3755/quintal.

Demand and Supply

• In Uttar Pradesh, sugar production has witnessed a shift from the range of 65-75 LMT to 115-125 LMT over the past seven years.
• The state’s sugar production is less affected by El Nino due to its extensive irrigation system supplied by perennial rivers.
• Despite below-normal monsoon rains, with a deficit of 48% in 2014 and 45% in 2015, the sugar production in the state reported higher when compared to normal monsoon years.
• Over the past four seasons, sugar production has ranged from 105 to 110 LMT, largely due to the diversion of sugarcane towards ethanol.
• During the 2022-23 season, Uttar Pradesh mills diverted close to 20 LMT of sugar towards ethanol. The sugar production in the state has touched 105.4 LMT.

News

• In Mandya, Karnataka, it has been stated that the mill would pay the government-determined fair and profitable price (FRP) to purchase sugarcane from farmers this year.
• Despite the low recovery, farmers were paid Rs. 2,800 per ton of sugarcane last year.
• The mill has started functioning due to government intervention and expressed confidence that work would be done efficiently.
• The initiation of crushing work is expected to benefit the farmers in the region.
• The mill has already deployed workers for the crushing operations and made arrangements to ensure that the crushing process is completed within 24 hours.
• The management has assured farmers that their outstanding bills will be paid within one week of the sugarcane supply.

OFB’s Opinion

• It is expected that the Indian monsoon will likely remain close to normal or above normal, based on the positive Indian Ocean Dipole (IOD) predicted by several global weather models. The IOD for July is expected to be positive, with a temperature exceeding 1 degree C in August and September.
• Previous El Nino years have shown that a positive IOD leads to increased monsoon rainfall. Taking into account these factors and weather yield models, it is expected that Indian sugar production for the 2023-24 season will reach 387.8 lakh metric tonnes (LMT), including ethanol diversion.