India's sugar output may rise to 26 mt

The increase this season could be largely on the back of a 4.5 per cent increase in cropping area.

India is expected to produce 26 million tonnes (mt) of sugar during the 2011-12 crushing season, beginning October, seven per cent more compared to 24.2 mt a year ago. This is largely because the sugarcane cropping area has been increased by 4.5 per cent to 5.16 million hectare.

According to a compilation by the Indian Sugar Mills Association (Isma) and the Federation of Cooperative Societies in Maharashtra, the closing sugar stocks as on September 30 is estimated at 5.6 mt.
 

SWEET SUCCESS Statement of closing sugar stocks
	As on Sept 30
Season	All India	Maharashtra
2006-07	11.5	3.4
2007-08	11.1	2.9
2008-09	3.2	0.5
2009-10	5.0	1.4
2010-11	6.3	3.6
2011-12	5.6	3.4
In million tonnes Source: Sugar Industry

“Preliminary estimates show the country will have a sugar production of 26 mt during 2011-12. There will be a surplus sugar of 4 mt over a domestic consumption of 22 mt. The international prices are very viable for exports from India during the next six months. Therefore, to grab the opportunity, one has to export from the end of November or beginning of December to ensure that most of the surplus can be disposed of and a reasonable price can be offered to farmers,” said Isma Director General Abinash Verma.

Verma recalled that the government had already allowed sugar exports of 1.5 mt as on date under open general licence.

However, the cooperative sugar industry in Maharashtra, India’s biggest sugar producer, has appealed to the Centre to allow mills to export 500,000 tonnes, in addition to the already announced 1.5 mt for the country. The Federation official said “The total demand for sugar in the country during the last two years was 22 mt and it is expected to increase to 22.5-23 mt during 2012-13. Due to superfluous sugar production between 2006-07 and 2010-11, except the 2008-09 season, there is excess supply over demand. Maharashtra is expected to have sugar production of 9.3 mt in 2011-12 compared to 9 mt last season. This is because of a nearly 5 per cent increase in the sugarcane availability.”

He informed that at present sugar prices in the global market were reported at $798.50 (Rs 36,467.49) a tonne.

Yogesh Pande, founder president of the Maharashtra Sugar Brokers Association, said: “If the government does not take an appropriate policy initiative to export surplus sugar in future, the country will face a severe deficit, which will lead to huge rise in sugar prices. Currently, sugar prices in India are lowest in the world.”