Margins of sugar mills may rise in FY18, states ICRA
DSIJ Intelligence / 27 Jul 2017
Sugar stocks are expected to be around 4.0 - 4.5 million MT at the end of the sugar season of 2018, as per the agency.
As per the estimates of credit rating agency ICRA, the margins of sugar mills are expected to face some pressure from the third quarter of FY18 onwards.
Sugar stocks are expected to be around 4.0 - 4.5 million MT at the end of the sugar season of 2018, as per the agency.
Production of sugar is expected to be around 24.5 million MT in SY2018, higher from 20.3 million MT in SY2017. In spite of the rise in the sugar production, the sugar stocks will remain at the same level as the estimated consumption also stood around 24.5 million MT in SY2018.
Along with this tight stock situation and an increase in the import duty on sugar to 50% from 40%, this is likely to support sugar prices in the near term. However, an increase in cane prices may result in some moderation in margins from Q3 FY2018 onwards, despite firm sugar prices.
Fair and remunerative price (FRP) of the sugar was fixed at Rs 255 per quintal for
This is likely to increase the production cost for sugar mills in FRP in states like Maharashtra, Karnataka, Andhra Pradesh, Telangana, etc.
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