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Sugar may taste bitter
Commodity Online
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April 16, 2007 14:49 IST

'Safe crops' are making its foray into Indian farmer's stable and this is causing problem for the country as one commodity faces shortage while some are over produced.

In Gujarat farmers abandoned groundnut to produce more profitable cotton while in many parts of the country sugar cane is having a field day with record harvest expected this year, especially in Uttar Pradesh, country's biggest sugar cane-grower.

This is likely to fetch lower prices for the farmers as there will be a glut in demand and those who migrated from other crops to Sugar may face a bitter taste this year.

But the farmers can take relief from the fact that India has the capacity and the world has the absorption power to accept the export of this excess production.

Surveys show the country may export more than 3 million tons this year and the government incentive to export has eased the situation especially since the global production of sugar is in surplus for the current year.

Analysts forecast a global 8.5 million-ton surplus this year and the possibility of this figure is only on the higher side.

This excess production has had its victims too with share prices of country's top sugar mills performing poorly in the stock index.




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