Dhampur sugar mills (as per the last concall) is already using maize instead of cane juice in its distillery. If maize is available at reasonable price then profits will be higher than last year.
Whatever is happening now in the sugar industry is not a surprise. sugar was more profitable than ethanol at Rs. 34-35. sugar prices have continued to rise for past many months and wholesale price will increase to Rs. 40/ 41 this year and Rs. 42/44 next year. Whatever the govt may do they cannot produce the sugarcane !! Maharashtra cane is actually 50% lower and recovery is hardly 8% – production will be 65% down.
Even if ethanol plants are idle, UP sugar mills will make higher profits than last year. If SAP is increased more than expected then sugar prices will go up accordingly.
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