New Delhi: Sugar output in India rose 11% until end-April due to higher cane crushing, bolstering the case for fresh shipments just before Prime Minister Manmohan Singh convenes a meeting of key ministers to discuss farm exports later on Wednesday.
Sugar production in India — the world’s second-biggest producer — touched 25.10 million tonne since October 1, up 2.5 million tonnes from a year before, data released by the Indian Sugar Mills Association showed on Wednesday. Largest producer Maharashtra reported a 6% rise in output to 8.83 million tonne, while second-biggest producer Uttar Pradesh witnessed an 18% jump to 6.95 million tonne. Production in Karnataka rose 9% to 3.71 million tonne and Tamil Nadu saw a 29% increase to 1.57 million tonne.
With production in Uttar Pradesh almost coming to an end, Isma expects another 650,000 tonne from Tamil Nadu, 200,000 tonne from Maharashtra and 100,000 tonne from Karnataka in 2011-12.
The data came ahead of the crucial meeting convened by Singh to defuse tension over agriculture minister Sharad Pawar’s letter to him last month, complaining that the “negative approach” of the food ministry, led by KV Thomas, towards sugar exports had resulted in heavy losses in earnings, which could have been used to clear cane arrears to farmers that have crossed R8,000 crore. Both Pawar and Thomas are also expected to raise the issue of guidelines on sugar export quota at the meeting.
Giving an instance of the negative approach, Pawar wrote that although an empowered group of ministers on March 26 decided to allow fresh sugar exports of one million tonne, on top of the two million tonne already approved in 2011-12, the food ministry is yet to notify it. The country resumed sugar exports in 2010-11 after two successive years of a domestic shortage when the country was forced to import.
Although the food ministry has estimated sugar output at 25.5 million tonne for 2011-12, Isma expects it to touch 26 million tonne and is pitching hard for fresh exports so that opening stocks of sugar for the next year get reduced to 5 million to 5.5 million tonne, compared with 6.8 million tonne in 2011-12. Good production as well as opening stocks in 2011-12 improved domestic supplies and kept prices subdued, dragging down mills’ sales realisation, Isma said recently.
Top sugar industry bodies — Isma and National Federation Of Co-operative Sugar Factories — have also said the country’s sugar production will likely exceed demand in the next marketing year, providing adequate leeway to the government to allow exports. The country needs around 21.5 million to 22 million tonne for annual consumption.
US raw sugar futures crashed 27% in 2011, the first annual fall in four years, but exports are still more remunerative as domestic wholesale prices have remained subdued more than eight months now due to adequate supplies. Wholesale prices of the S30 refined sugar variety in Mumbai are almost flat at around R3,002 to R3,121 per quintal.
Global sugar surplus might halve to 3 million tonnes in 2012-13, International Sugar Organisation senior economist Sergey Gudoshnikov said late last month, likely benefitting India if it decided to export next year as well. Isma director general Abinash Verma said, “It is certain that production in ensuing season 2012-13 will be higher than the domestic consumption and India will continue to export sugar.” NFCSF managing director Vinay Kumar has said, “Based on current sowing, sugar production in 2012-13 would touch 25 million tonne.”