Sugar output may outstrip demand soon

The country's sugar production is likely to outstrip demand at 25 million tonne in 2010-11 crop year starting October due to an increase in cane acreage, according to the industry.

"At this stage, we estimate 2010-11 sugar production will be at least 25 million tonne due to an increase in acreage," Indian Sugar Mills Association deputy director general M N Rao told reporters.

Sugar year runs from October to September. Sugar demand is expected to be around 23 million tonne next year, he said while addressing the media on 'sugar decontrol' on behalf of private and cooperative mills.

Food and Agriculture Minister Sharad Pawar also said on Tuesday that the sugar production will be more than the sweetener's requirement.

As per the data released by the agriculture ministry, there has been an increase of 13.3 per cent in cane acreage, at 4.74 million hectares as on July 2, as compared to 4.18 million hectares on the same date last year.

The National Federation of Sugar Cooperative Factories and ISMA, the two apex bodies of the sugar sector, have estimated 2009-10 sugar production at 19 million tonne and demand at 21.7 million tonne.

"Consumption is growing at a four per cent level every year and similarly the production should also grow at this pace to become self-sufficient," Goel said.

India, the world's second biggest producer but the largest consumer, will start the next year with an opening stock of 4.5 million tonne, he added.

Higher output than expected in the current crop year and better prospects for the next year has helped in containing the sugar prices.

The retail sugar prices, which had risen to around Rs 50 kg during mid-January, have come down to Rs 30 a kg now in the national capital.