Sugar prices likely to come down further

Domestic production for the current sugar crop year (October 2009-September 2010) is now estimated to be over 18 million tonne—up by 11 per cent from industry projections of 16 million tonnes. “Higher production means the country doesn’t have to import sugar, which may push prices lower,” a Food Ministry official said.

Aided by improved domestic forecast and higher production in Brazil, sugar prices have dipped to Rs 35 per kg in Delhi’s market this week,  from a peak of last year’s Rs 50. India requires 23 million tonnes annually and it produced 30 per cent less due to last year’s drought. 

Sugar cane plantation in India increased by 7.5 per cent as farmers planted 3.89 million hectare of sugar cane by mid-May. If the planting continues in the same pace and the country receives normal monsoon, the output may climb as much as 35 per cent to 25 million metric tonne in the year beginning October.

Following the better output forecast, the Centre is considering to roll back some measures taken last year to handle a severe sugar shortage. Food and Agriculture Minister Sharad Pawar  recently said the government was not in a hurry to impose import duty and would consider it after assessing the production situation of the current year as well as the next year.

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