India’s sugar stocks at the end of the current marketing year through September will drop almost 18% from a year before, partly reducing a glut in the market, according to an estimate by the Indian Sugar Mills Association (ISMA). The stocks will still be too high to keep domestic supplies steady.

Stocks at the end of 2015-16 will touch 75 lakh tonne, compared with 91 lakh tonne a year before, thanks to lower production due to dry weather and growing exports to take advantage of a government rule.

The country’s sugar production up to end-March touched 237 lakh tonne, down 11 lakh tonne from a year earlier.

Only 215 sugar mills continue to crush sugarcane as of March 31, compared with 366 a year before. In the last season, 35 lakh tonne of sugar was produced after after April 1. With a lower number of sugar mills operating in the current season, sugar production in the balance period in the current season would be lower.

Maharashtra has produced 82 lakh tonne of sugar so far, against 93.6 lakh tonnes a year earlier. As compared with 135 sugar mills which were still working as on March 31, 2015, 58 sugar mills are crushing cane in Maharashtra as of now, ISMA said. Most of these sugar mills are operating in Kolhapur, Pune and Sangli districts, which were not so badly affected due to less water availability, and therefore, it is generally expected that another 5 to 6 lakh tonne may get further produced from Maharashtra.

UP has produced 65.7 lakh tonne by end-March, up from 63.4 lakh tonne a year earlier.  However, against 76 sugar mills which were functioning at the end of March last year, only 48 sugar mills are currently crushing sugarcane in the state.

Karnataka has produced 40.16 lakh tonne so far, slightly lower than the 42.47 lakh tonne produced a year before.

Only 15 mills are still operating, against 51 a year before.  Tamil Nadu has produced 8 lakh tonne so far, slightly higher than the 7.53 lakh tonne in the same period last year. Other producing states like Uttarakhand, Bihar, Haryana, Punjab, Madhya Pradesh, Gujarat, Andhra Pradesh and Telangana have produced either a similar quantity of sugar as last year, or slightly higher, in the current season.

Poor rainfall, low water reserves may hit output

ISMA said field reports suggested that due to lower rainfall and lower water availability in reservoirs in some districts in Maharashtra and North Karnataka, the acreage of sugarcane available for harvesting in 2016-17 will be lower.

“Therefore, there is a general expectation that sugar production during 2016-17 SS from the states of Maharashtra and Karnataka, due to lower acreage in some of their districts, will be lower than the current sugar season,” ISMA said.

However, output in UP and Tamil Nadu are expected to rise due to better yield and recovery. So the lower expected sugar production from Maharashtra and Karnataka may be significantly compensated by higher production from UP and Tamil Nadu, ISMA said. Also, adequate sugar stocks already available will keep supplies smooth, it added.