USDA forecasts next season sugar output at 22.7 mt

After two years of low output, India’s sugar production is likely to rise by 28 per cent to 22.7 million tonnes (mt) in the 2010-11 season starting October on account of expected higher cane supplies, the US Department of Agriculture (USDA) has said in a report.

Sugar production in India, the world’s second-largest producer but biggest consumer, is estimated at 17.7 million tonnes in the current 2009-10 season (October-September). In the previous year, the country produced 14.53 million tonnes.

The estimate of higher sugar production by the USDA for the next season will help the government in keeping prices under control and also reduce the country’s import dependence.

The country had to resort to import as output fell below the domestic demand of 23 million tonnes leading to high sugar prices in January this year. Sugar prices had touched Rs 50 a kg in January but now the rates have come down to Rs 32-34 a kg.

“Sugarcane and sugar production in India typically follows a six to eight year cycle, wherein three to four years of higher production are followed by two to three years of lower production,” the Department noted.

“After two consecutive years of declining sugar production, production resurged in marketing year 2009-10 and is set to gain strongly in the upcoming marketing year 2010-11,” it added.

Maharashtra’s sugar production is forecast to increase to 7.4 million tonnes in 2010-11 from 6.3 million tonnes in the current season, while the output in Uttar Pradesh is estimated to rise to 6.5 million tonnes from 5.2 million tonnes.

The USDA attributed the rise in sugar production in the next season to higher cane acreage, which it said is expected to increase by 13 per cent to 4.8 million hectares as farmers realised higher rates for their cane this season.

“Assuming normal monsoon and subsequent weather condition, yields are expected to improve over last year’s adverse weather impacted crop,” the report said, adding that sugarcane production in 2010-11 season is forecast higher at 325 million tonnes against 282 million tonnes in the previous season.