Improved sugar prices rekindle hope of cane farmers

Sugarcane farmers hope for better year

MUMBAI: In a recent report released by the union agriculture ministry for 2017-18, sugarcane acreage in the country stood at 41.9 lakh hectare as of last week, which is little lower than 42.3 lakh hectare a year ago.
With the forecast of near normal monsoon this season, the sugarcane production in the country is expected to improve in this season which may offer reason for smile to sugarcane farmers, said Ritesh Kumar Sahu, Fundamental Analyst –Agri Commodities, Angel Commodities Broking.
Last year, the Cabinet Committee on Economic Affairs (CCEA) did not change the fair and remunerative price (FRP) for the farmers due to lower prices of sugar. But with the increase in sugar prices, , it is likely that CCEA may approve Rs 25 per quintal hike in the FRP for sugarcane for 2017-18 season beginning October, said Sahu.
During 2009-10, the FRP was about Rs 130 per quintal, and if government takes decision to revise the prices, it will be seventh increase since 2010-11. The sugar cane prices or FRP, minimum price that farmers are legally guaranteed, will also increase by almost 96 percent to Rs. 255 per quintal, he said.
On the other hand, the prices of sugar in the country increased only about 38% to Rs. 3700 per quintal since 2011. The prices have been abysmally low during 2015, when it dropped to Rs 2,000 per quintal.
During the current fiscal, sugar futures have declined from 3,900 levels to 3,650 levels on reports of sufficient availability of sugar in the physical market due to implementation of stock limits for the mills and traders by the government, coupled with sufficient stocks in the country due to enough production and slow-down in consumption.
Moreover, government allowed duty-free import of raw sugar up to 5 lakh ton to improve availability of sugar.
The US Department of Agriculture (USDA), in its biannual report said that India’s sugar production during 2017-18 (October-September) is expected to increase by 18 percent to 25.8 million metric ton. For the second consecutive year, Uttar Pradesh is expected to be the largest producers of sugar in India, followed by Maharashtra.