Sugar output in India's biggest cane producing state is expected at 5 million tonnes in the current season, government sources said on Monday, 19 percent more than an earlier estimate as mills pay more to farmers. Higher output in Uttar Pradesh will help India, the world's biggest sugar consumer, produce more, putting further pressure on benchmark New York prices that have fallen sharply in the past few weeks.
At 0932 GMT, ICE May raw sugar was up 0.13 cent, or 0.7 percent, at 18.77 cents a lb. The mills have already produced 4.7 million tonnes between October 1 and March 20, said sources at the state Cane Development Department, who did not wish to be identified. The state government officials had previously expected an output of 4.2 million tonnes, higher than 3.5 million tonnes forecast when the cane crushing season began in October. Output in 2008/09 was at 4.1 million tonnes.
Higher cane prices paid to farmers ensured that the crop was not diverted for alternative sweeteners like jaggery, said S.L. Gupta, secretary general of Uttar Pradesh Sugar Mills Association. Mills in the state have paid an average over 250 rupees ($5.49) per 100 kg to farmers in the current season, up from about 140 rupees a year ago.