Sugar output in 2020-21 estimated to rise 12% to 30.5 mn tonnes

This would be 12 per cent higher than estimated production of 27.2 MT in the current 2019-20 cycle

With the forecast of a bountiful monsoon, domestic sugar production is estimated at 30.5 million tonnes (MT) in the 2020-21 crushing season, which would be 12 per cent higher than the estimated production of 27.2 MT this season.

These projections have been made by the Indian Sugar Mills Association (ISMA) assuming normal rainfall and other ‘optimum conditions’. The pan India cane acreage has been pegged at 5.23 million hectares (MH) in 2020-21, 8 per cent higher than this season’s cropped area of 4.84 MH.

Thanks to higher cane availability and surplus sugar production, it is estimated that a larger quantity of cane juice and B molasses will get diverted for ethanol production.

In its report released on Thursday, ISMA projected that the diversion to ethanol will help reduce sugar production by 1.5 MT to 30.5 MT in the next season. This year 0.8 MT of notional sugar production was diverted. However, a clear picture of such diversion would emerge after bids are placed by millers for ethanol supplies sometime in September.

With an opening balance (OB) of 14.5 MT in October 2019, estimated sugar production of 27.2 MT, expected domestic sales of 25 MT and exports of 5.2 MT during the current season, the opening stocks in October 2020 has been estimated at 11.5 MT.

Although, the OB in October 2020 will be 3 MT lower than the corresponding month last year, at 11.5 MT it will be 6.5 MT more than the domestic requirement till fresh sugar supply hits the market.

“With Thailand’s sugar production to further fall next season, beyond the 6 MT dip in the current season, there is an opportunity for India to export sugar to Asian countries,” the ISMA report added.

ISMA will review its analysis after looking at rainfall in July–September, reservoir levels, and satellite images in September. It will then release its first advance estimates for the 2020-21 season. By that time, the crop will be more mature and there will be more clarity on rainfall and water availability, as also the ethanol supply bids.

Uttar Pradesh is expected to remain the top sugar producer with 12.3 MT, as against 12.65 MT in the current season. This year, UP saw 0.6 MT of additional sugar production because the diversion of cane to gur/khandsari units was lower as a result of the lockdown.

Ethanol blending in petrol across India stood at 4.97 per cent up to June 15. This is despite lower production of sugarcane and molasses because of droughts in Maharashtra and Karnataka.