India’s sugar production seen rising again in the new season: USDA

US Department of Agriculture (USDA) has forecast India’s centrifugal sugar production at 34.7 million tonnes  (MT) in marketing year (MY) 2021/2022 (October-September), increasing by 3 per cent above the previous season. This forecast includes 600,000 tonnes of khandsari1 and 34.1 million tonnes of milled sugar (equivalent to 31.8 million tonnes of crystal white sugar). 

The USDA report adds, “According to the India Meteorological Department, India will likely have a normal monsoon season despite excessive heat and a forecasted extended summer season as a moderate intensity La Nina prevails over the Pacific Ocean. Typically, La Nina’s effects during the summer months bring an above-normal monsoon in India.”

“Assuming above average precipitation and reservoir levels, the state of Uttar Pradesh will be the largest producer of sugar in India for the fifth year in a row, followed by Maharashtra and Karnataka. Combined, these three states are expected to contribute nearly 84 percent of total sugar production in the out-year.” 

This estimate accounts for a near normal diversion of cane for sugar production and an expectation of a net reduction in the national average sugar recovery rate. “India will retain its existing export policy that will enable subsidized exports at six million tonnes. Consumption is forecast to rise by 2 per cent to 28.5 million tonnes, as the economy recovers from the pandemic. Closing stocks are estimated at 16.5 million tonnes and expected to further decline as India diverts more sugar toward ethanol production to meet its domestic blending mandate,” the USDA report added.

Sugar production in Uttar Pradesh is revised downward to 11.3 million tonnes from the earlier forecast of 12.3 million tonnes due to reported pest infestations due to incidences in rainwater-stagnated sugarcane farms and relatively higher diversion of stocks toward ethanol production. However, the production decline will be offset by gains in Maharashtra of 10.4 million tonnes, revised from 9 million tonnes, and Karnataka at 4.3 million tonnes. 

India’s revival of closed and non-operational sugar mills in the states of Uttarakhand, Bihar, and Karnataka is also underway that may support additional sugar production, USDA surmised.

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