Kingsman trims India sugar output forecast to 25.5 mt

Delayed start to crushing in Maharashtra coupled with lower yields across the country has prompted leading industry analyst Kingsman SA to pare its India sugar output forecast marginally down to 25.5 million tonnes for 2011-12 sugar year starting October.

Earlier, Kingsman had predicted an output of 26 mt.

In the first two months of harvesting, the country has produced 20 per cent more than it did in the same period last year.

“This worries us that we may have reduced our estimate too much too soon. However, the main reason for better production so far is that Uttar Pradesh started crushing earlier than last year,” Kingsman said in its latest update.

Kingsman expects consumption in India to grow from 22 mt to 22.55 mt. “Lower domestic prices in 2010-11 are expected to have stimulated demand.

In addition, the Government has lifted the restrictions on the amount of sugar trades can keep.

As a result, we expect to see the pipeline fattening up again and the mills sales increasing,” Kingsman said.

Kingsman's earlier estimates of production and consumption were similar to that of the industry body — Indian Sugar Mills Association (ISMA), which has pegged the 2011-12 output at 26 mt and consumption at 22 mt.

In its fourth revision this year, Kingsman has predicted a marginal increase in global output to 174.12 mt for 2011-12, up from 173.244 from its previous estimates.

This is on account of upward revision in output in countries including Brazil, China, the European Union and Vietnam. However, it has left the numbers unchanged for Thailand despite the impact of floods and also for the Philippines.

Besides India, Indonesia and the United States are the other countries where Kingsman has projected a decline in output.

source: thehindubusinessline