Trade body at variance with ISMA over sugar production estimate

All India Sugar Trade Association sees sugar output falling to 27 million tonnes; This is higher than ISMA's estimate of 26 million tonnes for 2019-20

A domestic sugar trade body today pegged India’s sugar production in the current 2019-20 crushing season at 27.4 million tonnes (MT), which is 1.4 MT higher than estimate provided by the Indian Sugar Mills Association (ISMA), which ISMA put the output at 26 million tonnes. ISMA is the representative body of the mills.

According to All India Sugar Trade Association (AISTA), sugar production is estimated to fall almost 17.5 per cent from 33.2 MT last year to 27.4 MT in the ongoing season.

In November 2019, ISMA had – in its preliminary projection – estimated sugar output to dip sharply by 20 per cent. It is likely to come out with second advance estimates of sugar production for 2019-20 cycle in February.

The major factor cited by AISTA for the lower sugar output is substantial decline in production in Maharashtra owing to drought and excessive rainfall in the Marathwada region and Western belt respectively last year. The state’s sugar production is estimated to fall 39 per cent from 10.7 MT in 2018-19 to 6.5 MT in the ongoing sugarcane crushing cycle.

These estimates were arrived at after considering sugar produced so far, likely trend in sugar production, recovery rate, sugarcane to be crushed and production of ethanol from B-heavy molasses.

About a MT of sugar would get adjusted on account of ethanol production from B-heavy molasses, which also contributed to lower sugar output this year.

Besides, Karnataka will witness dip in production by nearly 23 per cent from 4.4 MT last year to 3.4 MT this season.

However, India’s top sugar producer Uttar Pradesh is expected to marginally improve its output from 11.8 MT to 12 MT. AISTA said all major sugar groups in UP had augmented or were in the process of augmenting their ethanol producing capacity.

Meanwhile, AISTA projected that sugar export would top 4.5 MT in the backdrop of low availability of raw sugar in the domestic market. Earlier, ISMA director general Abinash Verma had told Business Standard there was a possibility of sugar exports touching 5 MT in this season.

So far, mills had contracted for exports to the tune of 2.5 MT against their respective maximum admissible export quantity (MAEQ). The prime offshore destinations for Indian sugar are Iran, Sri Lanka, Afghanistan, African countries etc.