India's sugar output may decline by 7% on lower acreage

Total acreage under sugarcane in India is estimated at around 4.99 million hectares (ha) in crushing season 2016-17, which is 5.5% lower than in the year-ago period

Sugar output in India is likely to decline by 7% in the crushing season 2016-17, beginning in September this year, due to a proportionate fall in acreage under cane.

In the first such forecast for crushing season 2016-17, the apex industry body Indian Sugar Mills Association (ISMA) estimated India's sugar output at 23.26 million tonnes, compared with 25.1 million tonnes for the year 2015-16.

Based on the satellite images procured in the latter part of June 2016, total acreage under sugarcane in India is estimated at around 4.99 million hectares (ha) in crushing season 2016-17, which is 5.5% lower than 5.28 million ha reported in the season 2015-16.

"ISMA estimates sugar production at 23.26 million tonnes in crushing season 2016-17, a decline of about 1.8-1.9 million tonnes from 25.1 million tonnes produced for the current season 2015-16," ISMA said in a report.

With an estimated opening balance on October 1, 2016, of 7.1 million tonnes, total sugar availability during the 12 months of next season will be 30.36 million tonnes, enough to meet the domestic sugar consumption requirement of 26 million tonnes for 2016-17 season, the ISMA report said.

For the sugar season 2017-18, the opening balance of about 4.3 million tonnes as on October 1, 2017, will be sufficient to meet the country's domestic requirement for the two months of October-November, 2017, next to next year, during which time new season's sugar production including the sugar produced in October-November 2017 would have comfortably come into the market.

"It is a preliminary estimate of sugarcane and sugar production in crushing season 2016-17. After considering rainfall in July-September, 2016, which is already expected to be above normal, water situation in reservoirs and second set of satellite images in September 2016 for across India, we will review the analysis by the end of September. By that time, the crop will be more mature and there will be more clarity on rainfall and water availability," ISMA said.

Meanwhile, Uttar Pradesh, the leading sugarcane producing state in India is estimated to have a slightly higher area under sugarcane at 2.34 million ha this year, against 2.30 million ha last year. Sugar industry is expecting a better yield in 2016-17 due to a substantial increase in area under the high yielding cane variety CO0238.

That will increase sugarcane production and availability for crushing by sugar mills. Further, unlike Maharashtra and North Karnataka, the weather has been good in Uttar Pradesh with adequate rainfall. Thus, sugar production in Uttar Pradesh in 2016-17 is estimated to be around 7.54 million tonnes, compared with 6.82 million tonnes in 2015-16.

Cane area in Maharashtra is estimated to have declined for crushing season 2016-17, which is mainly due to drought like situation last year, poor rainfall and lesser water availability for irrigation. As against the cane area of 1.05 million ha in 2015-16, area is expected to come down to 0.78 million ha in 2016-17. Sugar production is, therefore, estimated to be around 6.15 million tonnes in 2016-17, as against 8.41 million tonnes produced in 2015-16.