Sugar output may drop by over 7 per cent in 2016-17: ISMA
The government has recently imposed 20 per cent duty on export of the sweetener.
New Delhi: India's sugar production could decline by over 7 per cent to 23.26 million tonnes (MT) next marketing year starting October on a likely drop in sugarcane output due to poor rains in Maharasthra and Karnataka.
The sugar output is estimated to fall for the second straight year in 2016-17 marketing year (October-September) because of drought in major growing states.
Sugar production in India, the world's second largest sugar producer after Brazil, is estimated to have fallen to 25.1 MT in the current 2015-16 marketing year ending September from 28.3 MT in the previous year. Releasing the preliminary estimate, Indian Sugar Mills Association (ISMA) said sugar output is pegged at 23.26 MT in 2016-17.
"This is about 1.8-1.9 million tonnes less than the current 2015-16 production of around 25.1 million tonnes."
This is in line with the government's estimate of 23-23.5 MT for the next year. ISMA attributed the likely fall in sugar output to 5.5 per cent decline in sugarcane acreage to 4.99 million hectare in 2016-17 as against 5.28 million hectare in the previous year.
This would result in lower cane output. According to ISMA data, sugar production in Maharasthra -- the biggest producing state -- is estimated to decline to around 6.15 MT in 2016-17 from 8.40 MT in the current year.
"Maharashtra's cane area has declined in 2016-17, which is mainly due to drought-like situation last year, poor rainfall and lesser water availability for irrigation," ISMA said in a statement.
The cane area in the state is down at 7,80,000 hectare as against of 1.05 million hectare in 2015-16, it added. Sugar production in Uttar Pradesh -- the second largest sugar producing state -- is estimated to rise to 7.54 MT in 2016-17 marketing year from 6.82 MT in the current year.
The estimated rise in production is on account of likely higher cane area and yields. Despite estimated fall in next year's sugar output, ISMA said there would be sufficient stock to meet the domestic demand.
"With an estimated opening balance of 7.1 MT and estimated production of 23.26 MT, the sugar availability during the 12 months of next season will be 30.36 MT, enough to meet the domestic sugar consumption requirement of 26 MT in 2016-17," the Association added.
With sugar prices crossing Rs 40 per kg in retail markets and estimated fall in production next year, the government has recently imposed 20 per cent duty on export of the sweetener. It has also put stock holding limits on traders to curb hoarding and blackmarketing.