Sugar output may decline 19% to 8.5 million tonnes in the year starting 1 October from 10.5 million tonnes in the previous season.
Sugar harvest in Maharashtra, India’s top producer, may tumble this year as a dry spell triggered by the strongest El Nino in two decades hurt crop yields.
Production may decline 19% to 8.5 million tonnes in the year starting 1 October from 10.5 million tonnes in the previous season, Sanjeev Babar, managing director of Maharashtra State Cooperative Sugar Factories Federation Ltd, said by phone from Mumbai on 7 September. The cane harvest may drop to 75 million tonnes to 80 million tonnes, from 92.9 million tonnes a year earlier, he said.
A smaller harvest in India may help narrow one-fifth year of global surplus that’s pushed down prices in New York for a fourth straight year. Futures gained for a second week as El Nino-induced dry weather threatens crop in Thailand, the second-largest shipper and on signs of demand improving from China, the world’s top importer.
“Barring some places, the overall crop is in a bad shape because of the dry weather,” Babar said. “Crushing will be definitely delayed beyond 15 October. A lot of cane is being diverted for use as cattle fodder.”
Moisture stress
Rice, soybean and sugar cane are among crops in India facing moisture stress as the strongest El Nino since 1997-98 parches vast tracts of farm land. The water level in 17 main reservoirs in Maharashtra was 41% below average on 3 September, government data show. Rains have been 17% to 52% less than normal across Maharashtra since 1 June, according to the weather office.
Prices on the ICE Futures US climbed 2.7% last week to 11.27 cents a pound, rebounding from a seven-year low of 10.13 cents reached on 24 August. White sugar for December delivery on ICE Futures Europe traded 0.2% lower at $351.40 a tonne on Monday.
The Indian Sugar Mills Association (ISMA) will analyse rainfall data this month before revising its estimate of 28 million tonnes of production for the nation in 2015-16, Director General Abinash Verma said by phone on Monday.
“There is a drought like situation in Maharashtra which may negatively impact productivity and recovery,” Verma said. “The retreating monsoon has been good in the last three years in Maharashtra. We would like to wait before reviewing our forecast.” Bloomberg