Production in the globe's second-largest generator is projected to be less than initial forecasts in September, according to Bloomberg.
The Indian Sugar Mills Association said the elevated price of sugarcane might prompt some mills to temporarily hold off on crushing processes. Director general Abinash Verma said the projection of 25 million metric tons about two months ago for the year started October 1 is unlikely. Producers of the sweetener in Uttar Pradesh, the top producer of sugarcane, are likely to shutter generation while the government negotiates prices.
"The market is expecting that sugar cane price may be reduced in Uttar Pradesh, or recommendations of Rangarajan committee will be adopted, which will be positive for the millers," analyst Sanjay Manyal with ICICIdirect.com told the news source on Wednesday. "A resolution to the issue has to be found."
At 9:22 a.m. on Wednesday, sugar futures advanced 0.28 percent, a 0.0005-cent rise to 0.177 per pound.
The Wall Street Journal reports the U.S. Department of Agriculture is stepping forward with loans to support sugar companies in the U.S., despite a large amount of defaults by some companies since 2000.
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