India’s sugar output seen falling marginally this fiscal; new numbers expected next month

India’s sugar output is likely to decrease marginally this year due to the possibility of lower cane yields because of white grub infestation in Maharashtra and water logging in the cane fields of Uttar Pradesh.

The Indian Sugar Manufacturers Association (ISMA) is scheduled to meet on November 29 to arrive at the final sugar output figure for the current season, which started in October. However, preliminary indications suggest that the apex sugar body’s members would lower their sugar production forecast to around 32 million tonnes for the current crushing season from 32.25 million tonnes the previous season.

ISMA had put India’s sugar output between 35 and 35.5 million tonnes in its First Advanced Estimate released in July.

The decline in sugar output would be beneficial for cane crushing mills, which are apprehensive about starting production for the current season, amid fears of a worsening supply glut.

India is estimated to have started this season with over 10 million tonnes of surplus inventory, resulting in lack of storage space for the new season output.

A couple of major cane growing regions in Maharashtra, including Marathwada, have received poor rainfall this season. Select cane growing regions of Karnataka have also received deficient rain this monsoon season.

The Maharashtra government, meanwhile, has started assessment of the overall impact of deficient rain in the state. Various reports suggest around half the states 45,000 villages are facing drought.

Estimating higher output, sugar prices in India moved in a narrow range of Rs 29.80-30.50 a kg over the last one month as against the Centre’s minimum selling price (MSP) of Rs 29 a kg.

Meanwhile, cane acreage in Uttar Pradesh is estimated to have risen to 2.34 million hectares (ha) from 2.33 million ha in 2017-18. Cane area in Maharashtra has risen about 25 per cent in 2018-19 SS to 1.14 million ha in 2018-19 from 0.92 million ha in 2017-18.

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at shekhar.ghosh@indoasiancommodities.in.

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