Cogencis, Thursday, Oct 31
By Stuti Chawla
NEW DELHI – The government today set sugar mills' sale quota for November at 2.05 mln tn, marginally lower than 2.10 mln tn for October, a senior government official said.
The market was expecting the government to permit sale of only 1.8-1.9 mln tn sugar in November, as the festival season is over.
The quota was lowered only marginally from October, as mills need adequate working capital during the crushing season, the official said.
Though some mills in Uttar Pradesh and Karnataka have already started crushing operations for the season, most others are likely to come on stream by mid-November.
India's annual sugar consumption is about 26 mln tn, which translates to roughly 2.2 mln tn a month. For the last few months, the government has been deliberately setting the monthly quota slightly lower than the requirement to support domestic sugar prices and help mills clear cane dues.
The government is expected to continue with its policy of supporting sugar prices, as the market is likely to witness another year of glut, despite a drop in production.
The government expects sugar production to decline to 27.5-28.0 mln tn this year, sharply lower than last year's record high of 33 mln tn, as cane availability is extremely poor in Maharashtra and parts of Karnataka due to low rains last year.
Even with the fall in production, the country is likely to have surplus supplies due to a large carry over from the last season. End
Edited by Mainak Moitra