Low cane output to hit sugar production

With a sharp decline in cane output in Maharashtra and Karnataka, sugar production in the country is likely to decline by seven per cent in the crushing season of 2016-17, industry body Indian Sugar Mills Association (ISMA) forecast in its first advanced estimates on Wednesday.

Based on the satellite images captured during the second week of September of cane acreage, ISMA estimates sugar production at 23.37 million tonnes for the crushing season, beginning October 1.

Last year, the sugar production was 25.1 million tonnes.

In July, ISMA had released its preliminary estimates of sugar production for 2016-17, based on the first survey of satellite mapping carried out in June, with an initial production estimate at 23.26 million tonnes.

“On the basis of the September satellite images, ISMA has estimated the total cane acreage at 49.99 lakh hectares, about five per cent less than 2015-16 on a pan-India basis,” ISMA said in a release.

Following two years of consequent drought, Maharashtra will lose a quarter of its production to claim the second position in terms of sugar production, with 6.27 million tonnes for the sugar season of 2016-17, as compared with 8.41 million tonnes the previous year. Uttar Pradesh will claim the first position with 12 per cent increase in sugar production at 7.67 million tonnes for 2016-17, in comparison to 6.84 million tonnes last year. ISMA’s survey forecast 22 per cent decline in sugar output in Karnataka at 3.19 million tonnes for 2016-17, as against 4.07 million tonnes in 2015-16. Sugar output is estimated to increase in Tamil Nadu by 12 per cent to 1.56 million tonnes this season, as against 1.39 million tonnes the previous sugar season.

Sugar sale during 2015-16 was lower than in 2014-15.

ISMA is estimating a higher sugar sale of 2.3-2.4 million tonnes in September because of the festival season and the pressure on some sugar mills to sell more sugar to achieve the stock levels of 37 per cent by end of September’16 as per government’s direction, which usually is on an average of around 2.02.1 million tonnes. “Accordingly, it is expected that domestic sales till September end i.e. for the 2015-16, may be around 25-25.1 million tonnes (as against 25.6 million tonnes last year). This will leave a closing balance of around 7.5 million tonnes as on September 30, 2016, which may be higher if 2.3-2.4 million is not sold by sugar mills,” the release said.