Tamil Nadu Sugar Output May Fall 40% In 2017/18 Y/Y

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MUMBAI (Commoditiescontrol) - Sugar production in Tamil Nadu is estimated to drop by 40 percent to 6-7
lakh tonnes in next sugar season 2017-18 (October-September), against the expected sugar production of
11-12 lakh tonnes of current season.

Sugar production is expected to drop sharply in next season, because of the back to back drought
conditions in the state from last three seasons, as area under sugarcane crop has reduced and recovery of
sugar has also droped.

Accordingly, as per the latest release by Ministry of Agriculture, sugarcane acreage in the south Indian
state was recorded at 2.54 lakh hectares as of 27 July 2017, which is 2.68 percent lesser from the last
year on corresponding day. So, the drop in cane area and sugar recovery may lead the production fall in
Tamil Nadu.

In current sugar season, as of last month Tamil Nadu sugar mills have crushed about 110 lakh tonnes of
sugarcane and produced nearly 10.25 lakh tonnes of sweetener.

However, Tamil Nadu has a special crushing season during the months of July to September, and during
that, it is expected to produce about 50,000 tonnes of more sugar. As per the reports, Ponni Sugars, EID
Parry's Nellikuppam Sugar Mill, Bannari Amman, Tiruvallur etc. were started crushing for middle-season.

Sugar prices were traded higher in the state at mill gate as well as in spot markets in current sugar
season, while it expected to remain uptrend for next season also, over the concern of lower output and
reduced stock in Tamil Nadu.

On other hand, Tamil Nadu sugar mills yet to pay Rs. 494 crore of sugarcane arrears for current season's
cane purchase, as of last week. In December 2016, state govt. had fixed the State Advised Price of Rs.
2,850 a tonne for sugarcane for 2016-17, kept it unchanged from 2015-16.
Sugar production is expected for 2016-17 and Projection for 2017-18*

Source: Directorate of Economics & Statistics GoI, ISMA, Trade Estimates

(By Commoditiescontrol Bureau: +91-22-40015532)