Sugar production may not cross 24.5 mn tonne in new season

In the current season October 2013-September 2014, sugar production has been around 24.3 mn tonnes

The department of sugar has called a meeting of cane commissioners shortly to assess the sugar production for the new season to start from October 2014-September 2015.

Following the fist advance estimates released by the ministry of agriculture, there is concern that sugar production may not cross 24.5 million tones unlike the earlier estimate.

According to officials, earlier the sugar production was estimated to be in the range of 24.5-25 million tonnes.
 

Official said, first the demand and production of sugar is to be estimates based on this production estimates which again holds the key for decision to be taken on continuation of the subsidy to be given for the raw sugar production for exports.

Officials said, if the domestic production is estimated less, diversion for raw sugar is to be considered post the availability of sugar for domestic consumption. In the ongoing season October 2013-September 2014, the production of sugar has been around 24.3 mn tonnes.

 According to first advance estimates released by the ministry of agriculture, production of sugarcane is estimated at 342.79 million tonnes, though lower by 7.23 million tonnes than the last year.

Officials estimated that not all sugarcane goes into sugar production as it gets diverted into ethanol, khandsari, jaggery etc. Immediately the ministry has forwarded the advance estimate figures to all states to compare it with their indivisual production figures before the meeting commences.

However they also added that there is surplus stock of sugar in the country as for the current season there will be a carryover stock of around 50-60 lakh tones even with 25 lakh tonne of sugar exported in the form of raw sugar.

Therefore a conscious decision was taken by the last government to divert the domestic production to the export market where the demand is for raw sugar and not processed sugar, said sources.

The subsidy thus is intended for helping the millers/ farmers to divert manufacturing of sugar to raw sugar. However with this year’s advance estimates showing possibility of less sugarcane production, this scheme will have to be considered in the backdrop of the domestic sugar availability.

Officials also added that this decision on the subsidy will be a political decision too with state elections announced in one of the sugar producing state of Maharashtra.

Meanwhile, the kharif grain output is likely to drop by 7% in the current crop year that started in July 2014 due to dry spells in many regions.

The output of crops is expected to touch 120.27 million tonnes (mt) in 2014-15, compared with the target of 130.25 mt for this year and actual output of 129.24 mt last year. The country had produced a record 264 mt of grain in 2013-14, including the rabi season

Monsoon rainfall deficit narrowed to 12% as of September 18 from the benchmark average, although it was as high as 43% until end-June and 22% up to end-July.

The first Advance Estimates of Production of major Kharif crops for 2014-15 have been released by the Department of Agriculture & Cooperation on 19th September, 2014.