India’s sugar production in the year starting October is expected to exceed last year's level of 24.5 million tonne due to higher yields following good rains, agriculture minister Sharad Pawar said on Monday. The farm minister's prediction is much brighter than the Indian Sugar Mills Association’s July forecast of a drop in output in 2013-14 to 23.70 million tonne.
Pawar said the recent good rains in cane-growing states have improved crop prospects. As of August 16, farmers have planted sugarcane over 4.85 million hectare compared with five million hectare a year before, according to the agriculture ministry data. Analysts said plentiful showers have brightened the prospects of sugar recovery from cane, which will help drive up the sweetener's production.
In July, ISMA had forecast a drop in output due to dry spells in parts of Maharashtra and Tamil Nadu, but affirmed that production would still exceed consumption — expected at around 22.50 million tonne.
The country will likely pile up surplus stocks of eight million tonne in the beginning of the next marketing year, which will keep supplies steady and prevent any irrational spiral in prices, according to industry executives.
ISMA has also predicted a 1.5% drop in the area under the cane crop in 2013-14 at 5.15 million hectare. The top industry body would review its production forecast around Diwali, before the crushing of cane starts in many parts of the country.
Onion supplies run into logistical hurdles
Pawar said that logistical problems due to rains have hurt onion supplies from key producing states such as Maharashtra, Tamil Nadu, Madhya Pradesh and Rajasthan. He, however, stressed that overall crop condition in the country is good even though dry spells in the key growing region of Nashik have affected the crop there.
Onions prices are ruling high although they have moderated somewhat following government measures, such as allowing Nafed to import the crop to boost supplies.
In Delhi, wholesale onion prices dropped to R34,000 per tonne on Monday from R48,000 a week before. Still, wholesale prices have jumped 48% so far this month.
The government last week fixed the benchmark export price of onion at $650 per tonne