India’s sugar production has been estimated at 34.5 million tonnes (mt) for the current season to September by the All-India Sugar Traders Association (AISTA), a body of traders and exporters. 

The estimate is lower than a record high of 36.5 mt sugar output projection made by the private sugar millers body Indian Sugar Mills Association (ISMA) in October. AISTA predictions, however, take into account weather-related issues that cropped up after October. 

But the production estimates are lower than last year’s output of 35.8 mt. An additional 5 mt of sugar production will be diverted for ethanol production, an AISTA statement said. 

Domestic offtake

The association has pegged exports at 7 mt this season against 11.2 mt last season. This will mean that the Centre may allow an additional one mt of sugar only for exports after having permitted 6 mt in November. 

The exports will have to be made before May 31. Already, exporters have struck deals to export 5.5 mt, leaving only a narrow window for global trade to buy from India.  

AISTA has projected domestic consumption at 27.5 mt and the closing stocks at 6 mt, unchanged from last season. 

The projections were made following a meeting of AISTA’s Crop Estimation Committee (CEC), chaired by its Vice-Chairman Rahil Shaikh, who is also Chairman of CEC, at a January 5 meeting. Leading agronomists, agri-economists, industry and trade leaders took part in the meeting.  

Lower yield in Maharashtra and Karnataka have dragged the production in both States. AISTA has pegged the output in Maharashtra at 12.4 mt this season against 13.7 mt last season. Karnataka’s output may decline to 5.7 mt from 6.2 mt 

Production in Uttar Pradesh will likely be higher at 10.5 mt (10.2 mt last season) and in Tamil Nadu, it has been predicted at 1.7 mt (1.3 mt).

“Harvest of sugarcane has not commenced in major-producing States and it may have an impact on the overall production,” AISTA said.

Red rot impact in UP

The association said Uttar Pradesh’s output dropped by a low recovery rate as sugarcane crop being affected by the red rot disease.

Crushing will begin later this month and the area under sugarcane in the northern State is higher, thus neutralizing lower yield. Also, utilisation of gur for gur (jaggery) and khandsari (unrefined cane sugar) was low initially. 

Trade sources said sugar production in Maharashtra is estimated low in view of heavy rains affecting the cane crop in October.

In Karnataka, several mills have increased their ethanol production capacity. This will result in the diversion of sugar production for ethanol. 

In Tamil Nadu, “good rains” have helped increase the area under sugarcane, AISTA said.