Sugar output in Maharashtra to decline 18% this year

May lower overall output in India to 26.5 million tonnes, down 6.4% from last year

Sugar output in Maharashtra, India’s largest producer, is likely to decline by 18 per cent this year due to low yield in drought-prone regions.

Early estimates by the Maharashtra State Federation of Cooperative Sugar Factories suggest sugar output in the state will be 8.6 million tonnes for the crushing season beginning October against 10.5 million tonnes last year.

The forecast is based on lower monsoon rainfall and its impact on cane productivity and sugar yield. If the forecast comes true, India’s sugar production will dip nearly 2 million tonnes.

“We estimate sugar output in Maharashtra at 8.6 million tonnes this year, a decline of 1.9 million tonnes from the last year, because of drought conditions in major producing regions,” said Sanjiv Babar, managing director, Maharashtra State Federation of Cooperative Sugar Factories.

  While the country received around 16 per cent less monsoon rainfall, Marathwada in Maharashtra, which contributes nearly 18 per cent of the state’s sugar output, had a 40 per cent deficit.

The Indian Sugar Mills’ Association (Isma) has factored in Maharashtra’s low output in its latest forecast of the country’s sugar production. Released on September 30, Isma forecast India’s sugar output in 2015-16 at 27 million tonnes against 28.3 million tonnes in the previous year. “Assuming lower yield, the overall sugar output in Maharashtra is estimated at 9 million tonnes,” said Abinash Verma, director-general, Isma.

Isma estimates overall cane acreage at 5.28 million hectares, 0.4 per cent less than in 2014-15. Domestic sugar consumption and exports in 2014-15 are estimated at 25.1 million tonnes and 1.1 million tonnes, respectively.

Prerna Sharma, an analyst with Emkay Commotrade, has forecast India’s sugar output in 2015-16 at 26.5 million tonnes, down 6.4 per cent from the previous year. For 2016-17, the estimates are worse as farmers fear with less water in reservoirs, cane may not be able to sustain for 12-18 months. Consequently, India's sugar output in the 2016-17 (October-September) season is likely to fall below 25 million tonnes. “If this happens we will witness the first shortfall after six years of surplus sugar production,” Sharma said.