USDA sees India's sugar output at 24.7 mt, up 27%

India’s sugar production in the upcoming season, beginning October 1, is seen rising 27 per cent on year to 24.7 mt, raw value, while imports are seen down at 1.2 mt, according to the US Department of Agriculture (USDA) in its recent report.

Increase in output is mainly due to higher estimates of sugarcane production, backed by better yield and higher planting, the report said.

Higher output would increase supply to the domestic market, and reduce import requirements as against 2009-10’s record imports of 4.5 mt.

India’s sugarcane and sugar production follows a six- to eight-year cycle, wherein, three to four years of higher output are followed by two to three years of lower production.

The estimated rise in sugar output is also attributed to less cane being diverted for gur production. The report projected gur output at 5.6 mt, compared with 6.6 mt last year.

The forecast of a normal monsoon in 2010 and better prices for the current sugarcane crop would also boost total acreage. India’s total cane acreage is seen rising 13 per cent on year to 4.8 million hectare next season, while sugarcane production is pegged at 325 mt, as against 282 mt last year, it said.

Meanwhile, the country’s sugar output in the current season is estimated to touch 19.5 mt because of higher availability of cane, the report said. Also, late rains in Oct-Jan in key growing states helped the growth of the cane crop.

The report said cane crushing in key states such as Maharashtra and Uttar Pradesh is expected to continue till the first week of May, nearly four weeks longer than last year due to lesser cane diversion.

This year, average sugar recovery rate stood at 10.3 per cent, as against 10 per cent a year ago, which led to higher estimates for this year’s output, it said. The report also stated that India is unlikely to resume sugar exports next season, and it would be limited to quota countries.

Consumption, stock
According to USDA, India’s annual sugar consumption is seen rising to 24.5 mt next year backed by improved domestic supply and a growing population. Bulk consumers such as bakeries and soft-drink manufacturers account for a major share of around 60 per cent, while rural households mainly use gur. The country’s ending stock for 2010-11 is pegged at 5.36 mt, as against 3.98 mt for this year. However, both estimates are below the three-month consumption requirement, the report said.