Sugar output to rise 4% in 2014-15 crushing season despite lower acreage

Area under coverage to fall on vagaries of monsoon rainfalls

Despite the vagaries of monsoon and deficiency in rains, resulting in lower acreage of sugarcane, sugar output is estimated to rise by a marginal four per cent in the 2014-15 crushing season. This is because high-recovery states such as Maharashtra and Karnataka, which fetch 11.5 per cent of average recovery, will have more sugarcane area.

According to estimates by Indian Sugar Mills Association , India’s sugar output in the crushing season beginning October would be 25.3 million tonnes.

“Based on the acreage, estimated yields and sugar recovery, as well as drawal of sugarcane by the sugar industry and current rainfall progress and availability of water in the reservoirs, the preliminary estimates for sugar production works out to around 25.3 million tonnes of sugar in the ensuing crushing season 2014-15, compared to 24.3 million tonnes in the current season,” ISMA said in a statement.

Satellite images captured during mid-June show acreage at 5.23 million hectares in 2014-15 crushing season, a marginal two per cent decline from the current crushing season.

While sugarcane acreage in Maharashtra and Karnataka was reported to be higher, coverage area in Uttar Pradesh and Tamil Nadu declined, according to ISMA estimates.

This year, cane acreage in Maharashtra is estimated to be 13 per cent higher thanks to increasing share of 18- and 15-month crop. Cane acreage is forecast to remain nine per cent lower this year in Uttar Pradesh. The agriculture ministry has set a target of 345 million tonnes of cane output this year.

However, higher production would add to the existing worry of excess sugar availability for mills. Unless realisation improves and production cost shrinks, sugar mills’ financials would continue to deteriorate, resulting in mounting cane arrears as witnessed in the current crushing season.