Sugar production declines after drought destroys crop

Sugar production India, the world's second-biggest producer of the sweetener, fell 8% in the six months to March 31 after a drought last year destroyed crops in some parts of the country.

Sugar production declined to 11.73 million tonne in the six-month period from 12.02 million tons a year ago, Vimal Jain, secretary at Indian Sugar Mills Association, a trade body, said in a phone interview.

With most of the cane crushing already over, sugar prices, which have risen 10% in India in the past year, may stay high for the next six months, helping Balrampur Chini Mills Ltd and other local producers boost profit, Vinit Birla, an analyst at Pranav Securities in Mumbai, said.

Dhampur Sugar Mills Ltd and Bajaj Hindusthan Ltd, India's second and third biggest producers, said April 18 second-quarter net incomes more than doubled because of higher prices. Mills in Uttar Pradesh, a key cane growing state, sell sugar at Rs 16 a kilogram (17 cents a pound) now, compared with 14.4 rupees a kilogram in April 2004.

Financial Express
Date: 10-5-2005