ISMA to raise sugar production estimate on increased cane yield

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The apex industry body Indian Sugar Mills Association (ISMA) is all set to revise the sweetener production estimates upwards for the current year due to an unexpected increase in cane yield in Maharashtra.


Revising its initial estimates of 25.1 million tonnes at the beginning of the crushing season 2017-18, ISMA raised India’s sugar production estimates by 1 million tonnes to 26.1 million tonnes on January 18. The sugar output was then estimated based on early indications of cane yield in Maharashtra when most operating mills had received early cane variety for crushing.


With the unseasonal rainfalls in November – December period helped cane grow to their full potential in Maharashtra this year as against drought-hit lower yield last year, experts have indicated a record sugar output in the state with an all-time high yield of all varieties of cane.


All India Sugar Trade Association has already revised 2017-18 sugar season production estimated from 26.4 million tonnes earlier to 29 million tons with Maharashtra production estimates raised from 8.5 million tonnes to 10 and Karnataka from 2.5 million tons to 3.5 million tonnes.


“We will take a final decision on sugar production number in our scheduled next board meeting on March 7. But, with the cane yield expected to remain much higher than its earlier estimates, we are confident of revising our sugar production estimates upwards next week. However, it remains to be seen the quantum of output increase for which the actual number of operational mills and their sugar production would come for our analysis by March 5th,” said Abinash Verma, Director General, ISMA.


Initial estimates suggest sugar output in Maharashtra between 8.2 – 8.5 million tonnes based on the availability of cane for crushing. Of the 185 operational mills in the state, seven have declared closure for the current season. At the beginning of the season, sugar mills estimated 65 million tonnes of cane availability for crushing in sugar factories of around 72 million tonnes of its output estimated in the state.


Interestingly, sugar mills have already surpassed this estimated crushing figure and have reported a total crushed cane of 76.76 million tonnes. With an average yield of 10.99 (0.21 per cent lower than last year’s 11.20 per cent), the state of Maharashtra has reported a total sugar production of 8.54 million tonnes. In terms of sugar production also, the mills have surpassed their cumulative output of 8.4 million tonnes forecast at the beginning of the season.


“As of now, around 12-15 per cent of the cane is estimated to remain un-harvested which would take the entire cane availability for crushing at 82-85 million tonnes or even higher. So, total sugar output in Maharashtra may comfortably cross 9 million tonnes which may even go upto 10 million tonnes. Based on this estimate, we may see India’s total sugar output at even 29-30 million tonnes,” said Sanjay Khatal, Managing Director, Maharashtra State Federation of Co-operative Sugar Factories.


With nearly 4 million tonnes of carry over stock, total sugar availability for the current season might stand at 33-34 million tonnes as against India’s consumption of 25 million tonnes.


With the sugar output is expected to remain surplus even next season, the government needs to allow exports of 1.5 million tonnes of white sugar for the current season and over 4 million tonnes of raw sugar for the next season. Experts, therefore, called for the removal of stock limit and export incentives for the current season and introduction of minimum indicative export quotas (MIEQ) for the next season.

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