Heavy flooding to bring down sugar output by 20% to 26 mn tonnes in 2019-20

Ethanol is disrupting the traditional sugarcane value chain and could be a viable option to hedge the sugar sector from seasonal fluctuations and export market shocks

Domestic sugar production in the 2019-20 crushing season is expected to decline by nearly 20 per cent to about 26 million tonnes (MT), from over 33 MT last year, according to Indian Sugar Mills Association (ISMA).

The sugarcane acreage is pegged at 4.83 million hectares (MH). Interestingly, the sugar forecast is almost eight per cent lower than ISMA’s own preliminary estimates announced in July for 2019-20, which had pegged sugar output at 28.2 MT based on the first satellite mapping, assuming normal south-west monsoon.

A multitude of factors have resulted in lower sugar output, including heavy rainfall