Uttar Pradesh Will Top Sugar Production 3rd Year In Row
India sugar production for the marketing year (MY) 2017-18 will rise 46 per cent to 32.4 MMT. Sugar production for MY 2018-19 has been forecasted to rise 4.3 per cent to touch a record 33.8 MMT, which includes 560,000 metric tons (MT) of khandsari (raw country sugar) and 31.1 MMT of milled sugar (33.3 MMT raw equivalent). An expectation of an improved sugar recovery rate for the second consecutive year increases in cane crushing volume as a result of larger cane production, and assumed benefits from higher cane by-product production (for integrated mills) should encourage higher sugar production.
For the third consecutive year, Uttar Pradesh (UP) will be the largest producer of sugar in India; followed by Maharashtra, which is expected to trail marginally behind UP. Also, sugar production in Karnataka will recover to its near normal levels (five-year average). Together, these states will contribute almost 84 per cent of total sugar production in the out-year. Cane supplies to jaggery manufacturing units will return to higher than normal levels, with out-year jaggery production reaching upwards of 6.6 MMT, 9.2 per cent above the current year’s estimate.
Concurrently, India’s sugar production in MY 2017-18 will rise 46 per cent to 32.4 MMT (combination of khandsari and mill sugar) due to higher than anticipated sugar production from Maharashtra and Karnataka. A 10 per cent increase in average cane yield along with an improved national sugar recovery rate from 11 percent to 11.32 percent will contribute to record sugar production. Also, receding cane arrears (reduced debts) from preceding seasons will help increase the availability of cane for supply to mills.
However, declining sugar prices in combination with a rising Fair and Remunerative Price (FRP) or State Advised Price (SAP) for MY 2017-18 has increased the backlog of the sugar companies’ dues payable to the farmers in the ongoing season, particularly in states where cane costs are not directly linked to Revenue Sharing Formula (RSF). In latter case, farmers are paid the FRP as a first installment; if dues to farmers under the RSF are more than the FRP, than they will be entitled to a second payment. The FRP for the ongoing season is Rs 255 which was Rs 230 in previous years.
Sugarcane & Sugar Production in Million Metric Ton-
Source: Global Agriculture Information Network
Sugarcane Production in MY 2018-19 will Rise to 415 MMT on 5.2 million hectares (MH)
Assuming favourable growing conditions and a positive outlook for the 2018 monsoon season, cane planting for MY 2018/19 is expected to rise by 250,000 hectares to 5.2 MH. Cane yield is expected to be at the current year’s level. The national average for cane yield has improved significantly and was up 10 percent above its five-year average of 69.6 MT per hectare, due to increase in the early season and high-yielding cane varieties in the states of UP and Maharashtra, along with superior cane management practices. As a result of the larger area and improved yield, sugarcane production in MY 2018/19 is expected to rise five per cent to 415 MMT. It will be a tussle for policy makers to emerge as the winner in sugar export amid record domestic productions and world sugar producer association’s efforts to challenge Indian subsidy programs in WTO.
