MUMBAI Jan 5 India's sugar production in
2016/17 is likely to fall to 22 million tonnes, down 4.3 percent
from an earlier estimate, as mills in its key producing state
are closing early due to a cane shortage, industry officials
A drop in production below India's consumption of around 25
million tonnes could lift local prices and prompt the world's
second-biggest consumer to allow duty-free imports of the
sweetener, supporting global prices that are trading near
their highest level in 1-1/2 months.
In the last two years back-to-back droughts have ravaged the
cane crop in the western state of Maharashtra, the country's top
"The impact of drought was much more severe in Maharashtra
than we anticipated. The state could end up with production of
around 4.5 million tonnes," B.B. Thombre, president of the
Western India Sugar Mills Association (WISMA) told Reuters on
The WISMA was earlier expecting the country to produce 23
million tonnes of sugar in the 2016/17 crushing season that
started on Oct. 1, anticipating Maharashtra will churn out 5.5
As Maharashtra's output has been revised down, the country's
total production could fall to 22 million tonnes, Thombre said.
Maharashtra had produced 8.41 million tonnes of sugar in the
2015/16 season, while India's total output was 25.1 million
Sugar mills in Maharashtra typically operate between
November to April, but this year so far 25 mills have stopped
crushing due to lower cane supplies.
"Some sugar mills have already closed operations due to cane
shortage and most mills will close operations by February end,"
said Sanjeev Babar, managing director of the Maharashtra State
Co-operative Sugar Factories Federation, on Wednesday.
Local sugar prices are moving up on an expected shortfall in
output and could prompt the government to allow duty free
imports of the sweetener, a Mumbai-based dealer with a global
trading firm said on Wednesday.
"Ahead of state elections the government will try to keep a
lid on prices. Right now it is more interested in protecting
consumers than farmers," the dealer said.
India's election commission on Wednesday scheduled five
state polls for the next two months that will test support for
Prime Minister Narendra Modi's gamble to abolish
(Reporting by Rajendra Jadhav; Editing by Christian