Sugar output up 33% in early crushing season

Production in the first month and a half of the current sugar year (it begins on October 1) is up 33 per cent over the same period last year, to 761,000 tonnes till Tuesday, November 15, chiefly due to a rise from Maharashtra.

At the same time last year, total production was 574,000 tonnes. Also, shows data from the Indian Sugar Mills Association (Isma), mills exported 80,000 tonnes last month and have contracted to send 200,000-300,000 tonnes this month.

“(Cane) Crushing operations for the current 2015-16 sugar season started late October and early November,” said Isma. “As on mid-November, 175 mills have started crushing, as against 155 in the 2014-15 season, same time.”  

At the season's outset, Isma estimated India’s total production at 27 million tonnes, assuming a lower yield in Maharashtra after drought in major cane growing regions. Rating agency ICRA's latest report outs it at 26.8 mt. Total output was 28.3 mt in crushing season 2014-15.

Even at 27 mt, the country would see a surplus, the sixth such year. Estimated consumption in 2015-16 is 23.5 mt. The Centre has made it mandatory for millers to export a combined four mt this season.

Mills in Maharashtra had produced 431,000 tonnes as on November 15, against 310,000 tonnes in the year-ago period. Karnataka reported 160,000 tonnes, almost similar to last year's in the corresponding period. Mills in Gujarat have produced 110,000 tonnes, against 78,000 tonnes in the year-ago period. In Tamil Nadu, it is 40,000 tonnes from last year's 12,000 tonnes in the same period.

Business chamber Assocham has said 1.2 mt of lower production might not impact sugar availability in the coming year but would certainly hit cane production in 2016-17.

“Being a long-duration crop, a prolonged El Niño (adverse weather) impact might adversely affect cane production in the coming year. Besides, an aggressive sugar export strategy with declining domestic production is likely to mount pressure on domestic prices from the 2016 summer,” says its study.