India's sugar output may decline this year due to Maharashtra drought

India's sugar output is set to decline 10-15 per cent in the 2013-14 crushing season due to lower cane availability from drought-hit Maharashtra districts, where sowing could not be finished or crops were damaged due to lack of monsoon showers in 2012.

"It is too early to forecast cane availability for the next season. But, yes, shortage of monsoon showers in 2012 will have some negative impact on acreage, resulting in lower estimates of cane output in the upcoming season. We have, however, not actually assessed the cane crop for the upcoming season, which is set to be done by June- end. But, it is for sure that cane output will be lower this year, beginning October," said D B Gavid, director (sugar), Office of Cane Commissioner, Government of Maharashtra.

As many as 16 districts in Maharashtra, including major cane growing regions like Marathwada, were affected badly due to water shortage. In the 2012 season, the monsoon showers were delayed by over a month in the beginning and oddly distributed later, thereby leaving these regions very dry.

As the largest sugar-producing state in India, Maharashtra contributes a third of India's overall sugar output. In the 2012-13 crushing season (October - September), the total sugar output in Maharashtra was estimated at between 7.9 - 8 million tonnes. By April 6, 2013, with a recovery of 11.54 per cent (against 11.36 per cent last year), the total sugar output was reported at 7.8 million tonnes (a decline from 8.25 million tonnes from the same time last year).

With the pace of lower plantation for the 12- and 18-month crop, the cane output will be lower, thereby translating into the proportionate decline in sugar output.

"Next year, cane availability is going to be even lower by 10-15 per cent as the sowing area under the rain-fed crop was gutted in the drought and remained barren for this season or the planted crops could not germinate due to lack of water," said a senior industry official.

Hence, the total sugar output is forecast to remain lower, in the range of between 0.8 - 1.2 million tonnes during the crushing season of 2013-14. With this, however, Maharashtra may lose the status of being India's largest sugar producing state, running behind Uttar Pradesh where sugar output is set to remain rangebound at 6.8-7 million tonnes in 2012-13.

This is set to translate into India's total sugar output between 23-24 million tonnes during the 2013-14 crushing season, lower from 24.6 million tonnes estimated by the apex trade body, Indian Sugar Mills Association (ISMA).

"Certainly, sowing in a few districts of Maharashtra has been impacted due to drought in the 2012 monsoon season. Its impact on overall sugar output is yet to be assessed though," said Abinash Verma, director general, ISMA.

For the next season, however, ISMA has forecast sugar output at 23 million tonnes.

The impact of the recently announced partial de-control of sugar is expected to be seen in the 2013 monsoon season, with an estimated higher sowing area resulting in more cane availability a year later.