Over 80% Mills Shut In Key Indian Sugar Producing State

MUMBAI,(Dow Jones Commodities News via Comtex) -- More than 80% of the sugar mills in Uttar Pradesh, India's second-largest producing state, closed down operations for the crop year ending September 2009 due to non-availability of cane, a senior industry official said Monday.

"Last year the mills were running until June due to higher production. But now only 30 mills are operational and they will also close down by the end of this month," said the official with U.P. Sugar Mills Association, who did not want to be named.
The state's total sugar production is likely to fall 25% to 4.7 million metric tons in the crop year, due to lower yields and cane production, said the official.

Sugar production in the state fell 32% to 3.9 million tons in the Oct. 1-Mar. 7 period from the same period a year earlier. Cane crushing declined by 26% to 43 million tons.

Sugar recovery from the cane came down to 8.9% from 9.9% a year earlier, the official said.

India's sugar output in 2008-09 is expected to be at 16 million tons, against last year's output of 26.3 million tons.
The country has allowed duty free raw sugar imports and fixed stock limits to meet the domestic supply shortfall.

SOURCE: marketwatch