India's Maharashtra cuts 2010-11 sugar output forecast

India's western Maharashtra state, the biggest sugar producer in the country, has revised downward its 2010/11 sugar output forecast to 9 million tonnes from the previous 9.1 million tonnes, said a senior state government official. "Production of 9 million tonnes is possible in the current year. Many sugar mills were forced to close operations due to early arrival of monsoon rains," said the official at the state's sugar commissioner's office.
Early arrival of monsoon rains in the state is likely to leave more than 1 million tonnes of cane uncrushed in 2010/11 season ending September, said another senior official at the state's sugar commissioner's office. Wet soil makes transporting cane to factories difficult. At the beginning of the season, industry officials were forecasting an output of 9.5 million tonnes, which was later trimmed to 9.1 million tonnes. The new forecast would be still higher than last year's output of 7.09 million tonnes.
Monsoon rains have covered half of Maharashtra state five days ahead of schedule, data with weather department showed. "Had rains come on the usual time, we would have produced 9.1 million tonnes. But early arrival of monsoon rains spoiled our crushing plans," said a senior official at the Maharashtra State Co-operative Sugar Factories Federation.
The mills in the state have produced 8.991 million tonnes of sugar by crushing 79.697 million tonnes of cane as on June 5, the federation official said. "The slight drop in the production is good news for the market, but prices are unlikely to rally. Already mills have produced enough surplus for the season," said Ashok Jain, president, Bombay Sugar Merchants Association (BSMA).
Millers said this season's uncrushed cane will be processed in the next season beginning from October, but the delay may discourage farmers from going for new cultivation. India is likely to produce 24.2 million tonnes of sugar in 2010/11, higher than local demand of about 22-23 million tonnes. In Kolhapur spot market in Maharashtra, sugar was steady at 2,500 rupees ($55.9) per 100 kg. At 4:56 pm, the most active sugar for June delivery on the National Commodity and Derivatives Exchange (NCDEX) was up 0.16 percent at 2,502 rupees per 100 kg.