Sugar stocks are in focus today amid expectations that the government will likely extend the sugar subsidy for another couple of months. M Manickam, executive vice chairman of Sakthi Sugars, spoke about the same.

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"Sugar production is higher than required by 5 million tonne. This sugar is not sellable anywhere in the world because our pricing is a way order back. Therefore, the only solution, in my opinion, is we should reduce fair and remunerative price (FRP),” Manickam said on Wednesday.

Talking about the export subsidy, Manickam said, “International markets can even go lower. If India gives subsidy the market will go lower that much and countries like Brazil, Australia have revenue sharing. So they are not going to be worried; whatever revenues come, the farmer gets 65 percent. Basically, the pain will be shared by everybody. Therefore, I do not think the subsidy is going to be a major factor to help.”

On the sugar prices front, he said, “If ethanol does come up maybe the sugar prices will maintain, but even we will talk for Rs 35-36 per kg minimum to break-even. So even at current prices with a buffer, we are losing money.”

“Therefore, I do not think the industry is going to pick up until the production comes down or some kind of shortage coming in,” he said.