Sugar recovery set to fall on high moisture content

Despite a favourable post-harvest climate, the average sugar recovery is likely to decline upto 0.7 per cent this year due to an unexpected delay in maturing of crop.

The average recovery in Uttar Pradesh is likely to decline to 9.2 per cent from the level of 9.9 - 10 per cent seen last year. Similarly, Maharashtra which tops the recovery rate in India, will have to be satisfied with a figure of a little over 10.8 - 11 per cent this year against the average of 11.5-11.7 per cent last year.

In the sugar industry, recovery is measured through the sugar obtained from each tonne of cane crushed.

If the transporters’ strike stretches, the recovery would be delayed further as harvested cane gradually loses sucrose content if not crushed within 3-4 days. However, the excessive January fog is also affecting the quality of the sugarcane. But, fog with a few hours of sunshine helps maintain sucrose content for 5-6 days after harvest.

As a result, India’s total sugar output has again been revised downwards to 17-18 million tonnes against the earlier estimates of 19-20 million tonnes. The country’s consumption, however, stood at 22.5 million tonnes which is set to be met through last year’s carryover stock of 11 million tonnes.

Meanwhile, initial indications are that Karnataka is overtaking Uttar Pradesh in sugar recovery with 10.87 per cent. Sugar mills in Uttar Pradesh recorded 9.8 per cent recovery during the year. Maharashtra continues to be in the first position with a recovery of 11.92 per cent.

“Late rains, coupled with low yield and low sucrose content in the average sugarcane has affected recovery this year. The recovery has been hit because of the late monsoon rains and high moisture content in the field,” said Sanjay Tapriya, director — finance, the Simbhaoli Sugar Mills Ltd.

Scientifically, high moisture content towards the end of harvest increases the weight of cane which also contains the maximum amount of water. This minimises the sucrose content in the cane.

Tapriya also forecast a 30 per cent decline in sugar output in Uttar Pradesh at 5.2-5.3 million tonnes this season compared to 7.2 million tonnes in the last sugar year (October - September).

Meanwhile, sugar prices in the spot and futures mar-ket have started rising because of the low output estimates and the ongoing transporters’ strike.

Both S30 and M30 varieties of sugar for mill delivery shot up Rs 25 in Agriculture Produce Marketing Committee (APMC) mandi in Vashi to close the day in the range of Rs 2,022-2,060 per quintal and Rs 1,858-1,875 per quintal respectively.

Transporters’ strike, running into its second day on Tuesday, affected the supply of sugar and resulted in price escalation,” said Rajendra Shah, partner of Hitendra Kumar Thakarshi & Co, a Vashi-based sugar trader. If the trend continues, sugar prices may hit Rs 21 per kg towards the end of the month, the trader said.

With the carryover stocks expected to exhaust by the first half this year, the industry will end up with 5 million tonnes of inventories towards the end of current sugar season, said B J Maheshwari, company secretary of Dwarikesh Sugar Industries .
source:BS