India's sugar output set to rise 45% to 29.5 mt in 2017-18 season

Two producing states of UP and Maharashtra alone are expected to produce over 10 million tonnes this season

Amid the substantially higher sugarcane yields per hectare reported by Maharashtra and North Karnataka, the Indian Sugar Mills Association (ISMA) on Wednesday increased the country’s sugar production estimates for the 2017-18 sugar season to 29.5 million tonnes, 45 per cent higher than last year’s 20.3 mt.

Two states – UP and Maharashtra – alone are expected to produce over 10 million tonnes this season.

According to the ISMA note, the yields recorded in Maharashtra and Karnataka are reportedly one of the highest ever by either of these states.

Last year, when the sugar production fell to 20.3 mt for the whole country, 4.2 mt for Maharashtra and 2.16 mt for Karnataka, thanks to a drought, the yields from both of these states were about 60 tonnes per hectare. However, the average yields in the current season from these states are reported to be around 100 tonnes per hectare and 91 tonnes per hectare, respectively.

The country’s sugar production as of February 28, 2018, was 23.05 mt – considering 479 sugar mills are still crushing, the output for the year will be higher.

Of the 29.5 mt, UP is expected to produce 10.51 mt, Maharashtra 10.13 mt and Karnataka 3.54 mt and the rest of the sugar production is expected to come from the other states.

With a much higher production – and surplus thereby, after considering 25 mt of estimated domestic consumption -- ISMA has proposed that the government export 1.5 mt of sugar. That could give extra cash flows to sugar mills and help ensure better payment to farmers and reduction in cane price arrears, which are accumulating to reach uncomfortable levels.