India's sugar output has been pegged lower by 21.5 per cent to 26 million tonnes for the ongoing marketing year considering possible fall in cane acreage in Maharasthra and Karnataka as well as diversion to ethanol manufacturing, according to industry body ISMA.
In July, the Indian Sugar Mills Association (ISMA) had made a preliminary estimate of 28.2 million tonnes of sugar production for the 2019-20 marketing year (October-September).
Mills will soon commence crushing operation, the industry body said and added that a better picture would emerge once the crushing starts fully and actual trend of yields and sugar recoveries becomes available.
According to the ISMA, mills produced 33.16 million tonne of sugar during the 2018-19 marketing year, of which sales were 25.5 million tonne.
"The fact that we did not have normal rainfall, sugar production during the current 2019-20 is expected to be lower than what was expected about four months back," Indian Sugar Mills Association (ISMA) said while releasing the first estimate.
The crop in the two main sugarcane-growing states, Maharashtra and Karnataka, which contribute around 35-40 per cent of the country's sugar, have been adversely impacted due to various reasons, it said in a statement.
Total cane acreage is estimated to be lower by 12 per cent to 48.31 lakh hectare this year from 55.02 lakh hectare a year ago.
According to the first estimate, production in Uttar Pradesh, the country's largest sugar-producing state, is estimated to be 12 million tonne in 2019-20, more or less at the same level as 11.82 million tonne last year, despite slight fall in cane acreage.
However, in Maharashtra, sugar production is estimated to drop by almost 40 per cent to around 6.2 million tonne in 2019-20 as against 10.72 million tonne in 2018-19.
According to the ISMA, floods affected cane-growing areas such as Kolhapur, Sangli, Satara and Pune in the August-September 2019 period. Due to water logging in cane fields for long duration, some of the cane has been destroyed completely, while some areas have been partially affected in terms of yield and recovery.
Hence, cane area in Maharashtra this year has further come down to 7.76 lakh hectare from the level it was reported about four months ago. It is 33 per cent lower than last year's acreage of 11.54 lakh hectare.
Nevertheless, some sugarcane fields in upland area will benefit in terms of yield per hectare as well as sugar recovery due to better water availability, it added.
Similarly, in Karnataka, sugar production is estimated to be around 3.2 million tonne in 2019-20 from 4.43 million tonne in 2018-19 due to fall in cane acreage by 21 per cent.
There was poor rainfall in 2018 last year in the cane-growing areas of Karnataka, reducing the acreage therein for 2019-20. Further, incessant rains in the first fortnight of August 2019 also affected the area in North Karnataka mainly in Belgaum and Bijapur districts, it said.
There has not been any major changes in the other sugarcane-growing states of the country, it added.
According to the ISMA, around 8.5 lakh tonnes of less sugar will be produced because of the diversion of cane juice and B-molasses into ethanol this year.
The exact diversion can be better determined once the bids are opened by the oil marketing companies (OMCs) and, therefore, if required, ISMA can revise the figures, it said.
The tender for ethanol procurement for 2019-20 is expected to be opened by the OMCs shortly. As per informal reports, the bid for the ethanol produced from B heavy/sugarcane juice would be higher this year, it added.
The country has an opening stock of 14.58 million tonnes as on October 1.
ISMA also said several sugar companies have already finalised contracts for exports and in October alone, it is learnt that about 7 to 8 lakh tonne of sugar exports were contracted.