According to a Reuters report, India's 2019-20 sugar production should fall to 26.9 million tonnes, 1.3 million tonnes below an August projection, due to unfavourable weather conditions, broker and analyst INTL FCStone said on Thursday. CLICK HERE FOR FULL REPORT
The rating agency ICRA expects domestic sugar production for SY2020 is likely to decline to around 28.2 million MT from 32.9 million MT in SY2019 owing to drought-like conditions in major sugar-producing states, such as, Maharashtra and Karnataka. In these states, the cane area has declined due to extreme weather conditions, thus adversely impacting the sugar production.
“The expected decline in the sugar production for SY2020 along with the announcement on creation of 4 MT of sugar buffer stock and subsidy on 6 MT sugar exports has resulted in a recent increase in the sugar prices to Rs 34-34.5/kg (ex-mill UP),” ICRA said in the September quarterly update.
ICRA believes that these along with other recent government support measures are likely to result in the improvement in liquidity of the sugar mills, thus supporting the cane payments to farmers to an extent, it added.
The financial performance of most sugar mills
in Q1FY2020 saw an improvement in the revenues and profitability due to relatively better performance of the sugar and distillery division on a YoY basis.