Area under cane may rise 38% in Karnataka

Karnataka, the third-largest producer of sugar in the country, is likely to reap bumper sugarcane crop for 2010-11, going by the current indications. The area under cane planting for the current kharif season has gone up by 38 per cent to 394,000 hectares compared to 285,000 hectares last year. The state had set a target of 366,000 hectares for 2010-11.

The rise in acreage is attributed to higher yield and productivity of cane last year due to excess rain in major growing areas. Better prices by millers also encouraged farmers to plant more cane this year. The yield per hectare and cane weight increased in the state last year due to excess rain in major growing areas in north Karnataka. Mills in the state achieved a sugar recovery rate of 10.79 per cent as against 10.43 per cent in the previous year.

According to data available with the state agriculture department, the area under cane has gone up by 125 per cent as against the normal planting of 315,000 hectares as on August 9. As a result, the sugar production for the year 2010-11 is likely to go up by 16-20 per cent to 2.9 million to 3 million tonnes.

The South Indian Sugar Mills Association (Sisma) has estimated that for the ongoing sugar season (October 2009-September 2010) production from Karnataka would touch 2.5 million tonnes as against 1.6 million tonnes, showing a growth of 53.3 per cent over the previous year.

The total cane crushed would touch 22.8 million tonnes by September as against 15.4 million tonnes crushed last year, a growth of 48 per cent. Already six sugar mills in southern Karnataka have recommenced crushing.

For the next sugar season commencing in October 2010, mills in southern Karnataka have already announced advance payment of Rs 1,800 a tonne, which is 28 per cent more than the fair and remunerative price (FRP) announced by the Centre. This is likely to put pressure on the margins of millers, as they don’t expect higher prices for the sugar during next season due to excess production in the country. Last week, mills in north Karnataka have sold their stock at Rs 26-27.5 a kg, while mills in south have sold at Rs 27-27.50 a kg.