EID Parry bets on import of raw sugar to maintain sugar production in FY18

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In a year, when sugar cane crushing is expected to come down due to the historic drought in Tamil Nadu, EID Parry is betting on the centre's allotment of 64,000-tonne import of raw sugar to maintain its financials. 

The company is expecting cane crushing to be up to 10 per cent lesser than last year (which was 44.4 lakh tonnes). 

However, the company has already entered into a contract for the 64,000-tonne raw sugar import orders, allotted by the central government for the company, which is expected to reach its facilities by June 30, 2017.

"The shortfall in Tamil Nadu could be only partially made up in Karnataka and  Andhra and therefore we  expect that there will  be a  marginally lesser cane by about 10 per cent in the next financial year," said V Ramesh, managing director of EID Parry in a recent earnings call.

Meanwhile, the government of  India (GoI) has decided to give licenses to various companies in south, west and east India for import of raw sugar at zero per cent duty and out of the total quantity of about 5 lakh tonne the government is allowing to import, EID Parry has been allotted 64,000 tonne. The company has contracted to buy the raw sugar from Brazil and it is expected to come in by June 30. 

"...because of the import of raw sugar, for which we will be entitled to 64,000 tonnes, overall sugar production and sales may not be very different from the current year," he added.

During the year ended March 2017, the company has crushed 44.4 lakh tonne of the cane as compared to 55.9 lakh tonne in the previous year, during which it had an overflow of sugar from the previous season. Due to the yield drop in Andhra Pradesh as well as loss of cane because of competition and very poor south-west monsoon in Karnataka, and very less water availability in western Tamil Nadu, the cane volumes came down substantially in the last quarter of 2016-17.

The company has posted a net profit of Rs 283.61 crore during the financial year 2016-17, as against a net loss of Rs 92.11 crore during the previous financial year. The total income during the year declined to Rs 2,631.21 crore from Rs 2,785.59 crore during the previous year.

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