Sugar production estimated to be 260 lakh tonnes: ISMA

Total sugar production in the country in the current sugar season would be around 260 lakh tonnes, nearly 20 per cent lower than the 2019-20 season’s 331.61 lakh tonnes, Indian Sugar Mills Association (ISMA) said a statement on Tuesday.

The total sugarcane production would be sufficient to produce 268.5 lakh tonnes of sugar, but 8.5 lakh tonnes less sugar would be produced as that much B heavy molasses and sugarcane juice would be diverted to produce ethanol for blending in gasoline

Sugarcane cultivation

The reason for the drop in sugar production was the shrink in area under sugarcane cultivation in two major cane-growing States – Maharashtra and Karnataka. As a result, the total sugarcane acreage is expected to shrink by 12 per cent to 48.31 lakh hectares as compared to the previous season’s 55 lakh hectares, ISMA said. ISMA’s preliminary projections in June this year projected the sugar production in the season to be 282 lakh tonnes.

The reduction in sugar production is mainly on account of the impact on the crop in Maharashtra and Karnataka, which together contribute 35 to 40 per cent of total sugar production in the country. The sugar production from Uttar Pradesh, the No. 1 sugar producing State in the country, on the other hand, is projected to be 120 lakh tonnes marginally higher than the previous season’s 118.21 lakh tonnes.

Drought conditions and floods

In Maharashtra, initial drought conditions and subsequent floods have damaged the cane crop, leading to an estimated drop of 40 per cent in sugar production. As against 107.2 lakh tonnes in the 2018-19 sugar season, the sugar production in the State is projected to be 62 lakh tonnes, according to ISMA.

Initial poor rainfall and subsequent water logging are feared to affect the sugarcane crop in Karnataka as well. The sugar production in the State is projected to be 32 lakh tonnes as against 44.3 lakh tonnes produced in the last season. ISMA said there is not much change is expected in sugar production in other sugar-producing States, which contributed 54.5 lakh tonnes in the previous season.

The total production of 268.5 lakh tonnes was arrived at without taking into account the diversion of B heavy molasses and cane juice for the production of ethanol. According to ISMA, the tender for ethanol procurement for the season is expected to be opened by the oil marketing companies (OMCs) very shortly.

But it said, as per informal reports, this year the bid for the ethanol produced from B heavy/sugarcane juice would be higher. This may lead to diversion of B heavy molasses and cane juice sufficient to produce 8.5 lakh tonnes of sugar, ISMA said adding that the exact diversion can be better determined only after the bids are opened by the OMCs.

Sugarcane price

As per reports submitted by the sugar mills to the government, sugar sales during the 2018-19 sugar season was 246 lakh tonnes. It has been seen that there are some sugar mills which sell more than the monthly sale quota given by the government to them, for various reasons including the pressure to pay cane price to the farmers and also because huge working capital is blocked in the high sugar inventory. There are reports from the market that another 8-9 lakh tonnes of sugar would have got sold over and above what has been reported by them to the government. Therefore, the sugar sales by the sugar mills during 2018-19 season is estimated to be 255 lakh tonnes.

Considering the opening balance of 107 lakh tonnes as in October 2018 and sugar and exports of around 38 lt and sugar sales of 255 lakh tonnes, the closing balance as on September 30 this year is estimated to be 145.81 lakh tonnes.

Against the new export policy of MAEQ of 60 lakh tonnes, several sugar companies have already finalised contracts for exports and in the month of October alone, it is learnt that about 7 to 8 lakh tonnes of sugar exports have been contracted for, ISMA said.

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