India's sugar production has increased by 7% in the current season, according to the Indian Sugar Mills Association (ISMA). However, the industry body has flagged financial stress affecting the sector.
Rise in Sugar Output
The country produced 32.3 million tonnes of sugar in the current season, up from 30.2 million tonnes in the previous season. The increase is attributed to higher cane availability and better recovery rates.
Regional Performance
Uttar Pradesh, the largest sugar-producing state, saw a 10% rise in output. Maharashtra and Karnataka also reported increases of 5% and 8%, respectively.
Financial Stress Concerns
Despite the production boost, ISMA has highlighted that the industry is facing severe financial stress. The association noted that sugar mills are struggling with high cane prices and low sugar prices in the domestic market.
Reasons for Stress
- High cane prices: The fair and remunerative price (FRP) of sugarcane has increased, raising production costs.
- Low sugar prices: Domestic sugar prices have remained subdued due to surplus supply.
- Export challenges: Global sugar prices are low, making exports less profitable.
Government Measures
ISMA has urged the government to intervene by increasing the minimum selling price (MSP) of sugar and providing financial support to mills. The association also called for measures to promote ethanol production to divert surplus cane.
Industry Outlook
The sugar industry is expected to face continued challenges unless policy support is provided. ISMA has recommended that the government consider a buffer stock scheme to stabilize prices.
In conclusion, while India's sugar output has risen, the financial health of the industry remains a concern. Stakeholders are hopeful that government action will alleviate the stress and ensure the sector's sustainability.
