Sugar output may rise 4%

Written by fe Bureau | New Delhi | Updated: Jul 12 2014, 08:07am hrs
India's sugar output is likely to rise 4% year-on-year in the next marketing year starting October despite poor monsoon showers, though production in Uttar Pradesh could drop due to an expected 9% fall in cane planting, according to a preliminary forecast by the Indian Sugar Mills Association (ISMA).

Sugar output in the world's second largest producer is expected to touch 25.30 million tonne in 2014-15, compared with 24.30 million tonne this year and 25.14 milllion tonne a year before, according to ISMA forecast. Consumption is expected to go up by to 24.50 million tonne in 2014-15, up 2% from the current year, it added.

ISMA said satellite images show higher cane area in Maharashtra and Karnataka from the 2013-14 level, although planting in Uttar Pradesh and Tamil Nadu has trailed. Since Maharashtra and Karnataka witness better cane yields and higher recovery rates than both UP and Tamil Nadu, overall production is going to be higher despite an expected 2% drop in overall cane area across the country in 2014-15 than the current marketing year which will end in September.

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However, there are doubts on the rainfall front in the western part of the country, which may have some impact on currently estimated yields and recoveries from Maharashtra and North Karnataka, the mills association said.

Since sugarcane crop is largely grown on irrigated area and with current water level in reservoirs being in good position, the impact of lower rainfall, if any, in June-July can be minimised, it added.

It is important to note that a similar situation had arisen in the 2012-13 sugar season and doubts were being raised on sugarcane and sugar production from the western part due to low rainfall in JuneJuly in that area. However, since the retreating monsoon, which brought rainfall in September-October, was good that year, the lower rainfall of June-July did not result in lower sugar production from these areas, the association said.

The association added that it will obtain satellite images again in August and September this year for more clarity on monsoon progress and crop area and will accordingly release its first advance estimate for 2014-15 in September 2014.

However, according to the preliminary estimate, while cane planting in Uttar Pradesh is expected to drop 9% in 2014-15, that in Maharashtra will likely rise 13%, more than offsetting the deficit in UP. While UP is the largest cane grower, Maharashtra is the biggest sugar producer, mainly due to a higher recovery rate, at least by 200 basis points, in the western state. While UP is estimated to have produced 6.5 million tonne of sugar in 2013-14, Maharshtra produced 7.7 million tonne.

Additionally, with the share of 18 month crop, that is adsali and the 15 month crop (pre-seasonal) being higher than the 2013-14 level, the estimated sugar production from Maharashtra could be higher as compared to 7.7 million tonnes produced in 2013-14 sugar season, according to the ISMA forecast.

With an estimated opening stocks of around 7.5 million tonne as of October 1 for the next sugar season and sugar production as estimated above, there will more than sufficient sugar to take care of the domestic requirement of around 245 lakh tonne for the next year, ISMA said.