Domestic
Scenario
Indian Sugar production during the year 2012-13 is estimated at around 24.5 million MT, lower by 2.00 per cent, compared to 25.00 million MT during the preceding year, owing to lower sugar realization and decrease in area for sugarcane production. Since last couple of years, the production has been declining owing to consistently lower prices and lack of support from the millers in spite of the government’s initiatives. Sugar is a derived product of sugarcane. The biggest producer of sugarcane in the country is Uttar Pradesh (37.2 per cent) followed by Maharashtra (23.5 per cent). Other major producers of sugarcane in the country are Karnataka (11.2 per cent), Tamil Nadu (10.6 per cent) and Andhra Pradesh (4.4 per cent). In terms of sugar production, Maharashtra is the biggest producer (36.5 per cent) followed by Uttar Pradesh (26.0 per cent). This is due to the high recovery rate in Maharashtra as the sugarcane crop in the state is of a longer duration than that in Uttar Pradesh.
Indian Sugar production during the year 2012-13 is estimated at around 24.5 million MT, lower by 2.00 per cent, compared to 25.00 million MT during the preceding year, owing to lower sugar realization and decrease in area for sugarcane production. Since last couple of years, the production has been declining owing to consistently lower prices and lack of support from the millers in spite of the government’s initiatives. Sugar is a derived product of sugarcane. The biggest producer of sugarcane in the country is Uttar Pradesh (37.2 per cent) followed by Maharashtra (23.5 per cent). Other major producers of sugarcane in the country are Karnataka (11.2 per cent), Tamil Nadu (10.6 per cent) and Andhra Pradesh (4.4 per cent). In terms of sugar production, Maharashtra is the biggest producer (36.5 per cent) followed by Uttar Pradesh (26.0 per cent). This is due to the high recovery rate in Maharashtra as the sugarcane crop in the state is of a longer duration than that in Uttar Pradesh.
International
Scenario
Global sugar production for 2013/14 is forecast at 174.85 million MT, narrowly setting a record with growth in Brazil and Thailand more than offsetting sharply lower production in India. International raw sugar prices are at levels not seen in nearly three years with prices less than half the peak set in February 2011. Brazil continues to be the leading producer of sugar (22.12 per cent) followed majorly by EU -27 (10.08 per cent), China (8.01 per cent), Thailand (5.67 per cent) & US (4.69 per cent). Global sugar consumption is projected at 167.35 million MT in 2013-14. The global ending stock for sugar is on the high at 38.23 million MT.
Global sugar production for 2013/14 is forecast at 174.85 million MT, narrowly setting a record with growth in Brazil and Thailand more than offsetting sharply lower production in India. International raw sugar prices are at levels not seen in nearly three years with prices less than half the peak set in February 2011. Brazil continues to be the leading producer of sugar (22.12 per cent) followed majorly by EU -27 (10.08 per cent), China (8.01 per cent), Thailand (5.67 per cent) & US (4.69 per cent). Global sugar consumption is projected at 167.35 million MT in 2013-14. The global ending stock for sugar is on the high at 38.23 million MT.
Price
Trend Analysis
The Sugar spot market price variation study indicates that the prices have been subdued since October 2012 owing to reports of lower demand and lack of support initiatives from the government. In the global market, sugar fell 39 per cent in the last two years and is down 8.5 per cent this year. The sweetener is thus, the worst performing commodity in the Standard & Poor’s gauge of 24 raw materials in 2013. On the other hand, global import demand is likely fall to 50.7 million MT in 2012-13 from 53.2 million MT a year earlier, while export availability will be little changed at 53.9 million MT compared with 54 million MT. Thus, the lower global trade estimates are still hinting at the weakness in the prices.
The Sugar spot market price variation study indicates that the prices have been subdued since October 2012 owing to reports of lower demand and lack of support initiatives from the government. In the global market, sugar fell 39 per cent in the last two years and is down 8.5 per cent this year. The sweetener is thus, the worst performing commodity in the Standard & Poor’s gauge of 24 raw materials in 2013. On the other hand, global import demand is likely fall to 50.7 million MT in 2012-13 from 53.2 million MT a year earlier, while export availability will be little changed at 53.9 million MT compared with 54 million MT. Thus, the lower global trade estimates are still hinting at the weakness in the prices.
As per the study, the prices have been weakening since the peak in October 2012. The prices have maintained a lower trajectory amidst lower export demand and lack of focus for the crop from the industries. In the Indian market, retail and stockists demand continues to be weak. Market is oversupplied. Many mills in Maharashtra and Uttar Pradesh are floating tenders as they need money to make cane payments. India's carry-forward stocks of sugar on October 1st 2013 are estimated at 8 million MT, up from 6.2 million MT a year earlier. India could export as much as 3 million tonnes of sugar in 2013-14 to get rid of excess supply, capitalizing on rising demand from Southeast Asia, the Middle East and Africa.
Production Price Forecast
Sugar production in India is estimated to touch 25 million MT in the sugar season 2013-14 starting from October. As per the estimate by industry body ISMA (Indian Sugar Mills Association), the availability of cane acreage for crushing in sugar season 2013-14, will be around 52.89 lakh hectares. This year, in spite of good rainfall received during the current monsoon season in major producing regions, the lack of possibility of getting remunerative prices for the crop is likely to lower the overall production. The upcoming season is likely to see sugarcane production of around 335-340 million MT. the Indian market is likely to trade between Rs. 2650 per quintal on the lower side and to the max of Rs. 3400 per quintal on the up.
