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Discrepancies in cane output estimation
A report of Geneva based SGS for Bloomberg, has come to a conclusion after carrying out a survey of 777 farmers across six States that sugar output may miss forecast as yields drop and that sugar output in India may drop short of Government and industry estimates as wet conditions curbed cane yields amid the country`s heaviest June monsoon rainfall in three years.
From the extracts of the report available in one newspaper, there seems to be two points of doubts in the analysis:
(a) The report considers a drawal rate of 64% of available cane by the sugar industry. However, during 2010-11, 71% was the drawal of cane by the sugar industry. It seems that SGS survey has taken an average drawal of last few years. This may not be a correct system, since the drawal percentage of cane by the sugar industry during higher sugar production years is substantially higher than the years when the sugarcane production is lower. Looking at past years of surplus cane availability and 2010-11, the drawal percentage would be around 71% in 2011-12, if not more.
(b) Heavy rains in June would have affected a small part of the sugarcane, especially the late sown crop. Review and revision of yields based on surveys through naked eye, may be misleading especially when the expected change in the yield is by a couple of tonnes per hectare. Such a review is best made only after sugarcane is harvested. Therefore, such a revision in the yield, if any, should be carried out around the end of November 2011, when significant quantity of sugarcane would have got harvested and better idea of yield would be available. Further, the ratoon which is around 50%, would be available for crushing from January 2012 only. Therefore, any review in estimation of yield with respect to ratoon should be done in or after January 2012
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