India's 2004-05 sugar production may decline 5 percent to 15.9 million metric tons (raw value basis) due to lower cane production. | |
| India is set to emerge as a net importer in 2004-05, with imports estimated at 1.0 million metric tons. |
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| According to USDA, total centrifugal sugar production in marketing year (MY) 2004-05 is forecast at 15.9 million metric tons (mmt), including 683,000 metric tons (mt) of khandsari, a low recovery centrifugal sugar, down 5 per cent from the 2003-04 estimate due to forecast tight sugarcane supplies. |
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| Delayed cane payments by the mills adversely influenced 2004-05 planting. Drought conditions in major cane growing regions of Maharashtra and parts of Gujarat, Karnataka, and Tamil Nadu further dampened planting prospects. The 2004-05 cane area is forecast to decline by 5 per cent to 3.9 million hectares. |
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| The cane yield will also be adversely affected by the dry conditions that will persist until the onset of 2004 monsoon. Anticipating normal weather conditions and adequate 2004 monsoon rains, 2004-05 sugarcane production is forecast at 240 mmt. |
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| After 2003-04, the sugar production estimate has been lowered to 16.7 mmt against the earlier estimate of 19.9 mmt on lower than anticipated cane supply. Cane production during the season was adversely affected by drought conditions in major cane growing regions of Maharashtra, Karnataka, and Gujarat. |
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| Maharashtra and parts of Karnataka also experienced a severe attack of wooly aphid, a sucking pest. This pushed down yields by 20-50 per cent and sugar recovery down 1 per cent in affected areas. |
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| Consequently, MY 2003-04 cane production is estimated lower at 256 mmt against earlier estimates of 280 mmt. The mill sugar production till end February 2004 is estimated at 11.1 mmt compared to 12.9 mmt during the comparable period last year. |
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| Due to insufficient cane supply, mill crushing is expected to be over by mid-May compared to end June last year. Despite increasing sugar prices, cane price payments to the farmers continue to be delayed. Some mills fell behind by 2-3 months versus the normal lag period of 2-3 weeks. |
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| Four consecutive years of record sugar production (1999-2000 to 2002-03), and consequent ballooning of sugar stocks and depressed sugar prices have led to a financial crisis in the Indian sugar industry. The government had to initiate measures to provide some fiscal relief to the sector. |
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| Low sugar production during the current season has increased local sugar prices. The forecast lower production during 2004-05 shall further firm domestic sugar prices and, hence, may improve the fiscal condition of the domestic sugar industry. |
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