Sugar prospects next season look brighter bl-premium-article-image

G. Chandrashekhar Updated - November 15, 2017 at 12:37 PM.

sugar

The London-based International Sugar Organisation (ISO) may have jumped the gun by forecasting that Indian sugar production next year (2012-13) would be lower than the current year's production estimate of 25.8 million tonnes (mt).

A senior official with ISO said during the recently held 41st council session in New Delhi that India may be able to produce 24.5 mt in the next season. He based the forecast on the cyclical nature of the country's sugar production. “In the last two years, sugar production has been good, so in the third year (2012-13) the output is likely to be low”, goes the argument. For 2011-12, area planted to cane was 51 lakh hectares.

According to the Agriculture Ministry, cane output was an estimated 351.2 mt while he Indian Sugar Mills Association (ISMA) still maintains that sugar production will be 26 mt. A significant part of the cane planting for the next season is over and the final acreage figures may come out soon.

Final acreage

So, the key to next year's sugar production is the final acreage number for cane. Will it be more than 50 lakh hectares or less? The latest available data suggest that planting this season is already two per cent higher than it was at this time last year.

It is, therefore, reasonable to assume that eventually the aggregate planted area will be as much it was last year or possibly a little higher.

In fact, the latter possibility is real because growers have received remunerative prices and are likely to maintain the planted area or even expand it.

More important is the fact that higher farm incomes are sure to encourage growers to undertake improved input application and management practices, the positive effect of which may be seen in yield and quality.

Given this emerging scenario, it may have been a little rash to predict that Indian sugar production next year could be lower. If anything, any change in production has the potential to be on the higher side rather than on the lower side. That said, what are the risks?

Risks

For one, the final planted area should cross 50 lakh hectares. Weather is another risk. Although India Meteorological Department has forecast a normal South-West monsoon, there are lingering concerns that total rainfall could be below normal. Weather aberrations can, of course, affect yields and quality; but little can be done to insulate the crop. In sum, subject to normal weather, it is reasonable to expect that in 2012-13 season, India's sugarcane production will be in the 340-350 mt range and that sugar production would be about 26 mt.

Demand is, of course, an entirely different dynamic. Whether consumption demand is 22 million or 23 million or 24 million tonnes is more of a conjecture than estimate based on empirical evidence. Yet, the emerging scenario suggests that India will have surplus sugar available for export in 2012-13 season although it may be difficult to quantify it at the moment. gchandra@thehindu.co.in

Published on April 27, 2012 16:44