Indian sugar prices drop as the commodity weakens in industry battle
A battle between sugar mills and sugarcane farmers could end up causing the Indian sugar industry about 25 percent in production, as the combatants await an Indian Supreme Court decision on pricing.
Farmers in Uttar Pradesh are starting to supply high-recovery sugarcane to jaggery units, threatening the sugar output in India this year.
With Indian farmers needing to turn sell their crop in order to plant their fields in wheat, pressure is on them to sell.
Sugarcane loses its sucrose (sweetener) content over a period of time, also pressuring farmers to sell quickly. Cane with lower sugar content isn't usable in sugar mills.
When Uttar Pradesh raised prices above the state advised price (SAP), it started the battle, as sugar mills in India argue they can't crush can profitably at those prices.
The two participants are awaiting a decision of the Supreme Court and Allahabad High Court. Until that time the commodity will struggle to maintain prices.
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