For the first time since 2005-06, Uttar Pradesh will likely pip Maharashtra as India’s largest sugar producing state in the marketing year starting October 1, even as the country stares at the prospect of a 7.3% fall in output in 2016-17 from a year before, according to a preliminary estimate by the Indian Sugar Mills Association (Isma).
Rough weather and low water availability are estimated to have driven down areas under the cane crop in Maharashtra by almost 26% to 7.8 lakh hectares, while the cane coverage in Uttar Pradesh is expected to have gone up 1.4%. So while Maharashtra could see its sugar output falling to around 61.5 lakh tonne in 2016-17, compared with 84.08 lakh tonne a year before, production in UP is estimated to go up to around 75.40 lakh tonne in 2016-17 from 68.22 lakh tonne in 2015-16, according to the Isma forecast.
Moreover, adequate rainfall and a substantial increase in area under the high yielding cane variety CO0238 have improved UP’s prospects . In recent years, while UP has been the country’s largest cane producer, Maharashtra has been the largest sugar producer, mainly due to much better yield in the western state.
The massive drop in the production of sugar in Maharashtra will help drag down the country’s production to 232.6 lakh tonne, compared with 251 lakh tonne a year before.
However, with an estimated opening stocks of 7.1 million tonne on October 1, and estimated production of 23.26 million tonne, the sugar availability in 2016-17 marketing year will be 30.36 million tonne, much higher than the domestic sugar consumption requirement of 26 million tonne, Isma said.
Based on the satellite images by late June, the total acreage under sugarcane is estimated to be around 49.91 lakh hectares in 2016-17, down 5.5% from 2015-16.
Isma projects opening stocks of 4.3 million tonne for the 2017-18 season, which will be sufficient to meet the country’s domestic requirement for roughly two months — October and November, 2017. And by the time the stocks start to deplete, fresh supplies, including the sugar produced in October-November 2017, would have comfortably come into the market. This means the country is unlikely to face much problems as far as sugar availability is concerned.
Sugar production in Karnataka is expected to drop to 32.2 lakh tonne in 2016-17, compared with 40.71 lakh tonne a year earlier, thanks to inadequate rainfall. In Tamil Nadu, however, sugar production is expected to go up to 15.6 lakh tonne in 2016-17, compared with 13.93 lakh tonne in the previous year.
Isma will issue its first advance estimate of the country’s sugar production in September, factoring in the rainfall pattern, water reserves across the country and more satellite images until then.
Last month, the government imposed a 20% duty on exports of sugar to keep domestic supplies steady in anticipation of a drop in production in 2016-17. The government has taken a series of measures in recent weeks to curb a rise in sugar prices, including suspending an earlier order for the compulsory sugar exports of 3.2 million tonne and capping the amount of sugar that dealers and traders can pile up at 500 tonne across states, except Kolkata, to discourage hoarding. Domestic sugar prices climbed around 40% since the current marketing year started on October 1, 2015.