IBEF: February 26, 2020
The Indian Sugar Mills Association (ISMA) revised the India’s sugar output estimate for marketing year 2019-20 (October to September) to 26.5 million tonnes (mt), from the earlier estimate of 26 mt.
Although, the production is estimated to remain nearly 18 per cent lower than that of the previous year because of the heavy monsoon rains and floods that have hit cane yield, mainly in Maharashtra and Karnataka.
The second advance estimate was released by ISMA which is based on the satellite images of both harvested and yet-to-be-harvested cane area. ISMA added that the lower sugar output is also because of the higher diversion to ethanol production. However, the production would not only be sufficient to meet domestic demand and export commitments but also leave behind a comfortable carry-forward stock of under 10 mt, ISMA said. Although, this is below the the previous year’s opening stock of 14.5 mt, it added.
In 2019-20, production from mills in Uttar Pradesh is expected to be about 11.8 mt, which is almost similar to what it produced in the previous sugar season.
While, production in Maharashtra is expected to be about 6.2 mt, against 10.72 mt last year, whereas the cumulative output from Karnataka sugar mills is estimated to witness a decline of 25 per cent to 3.3 mt. ISMA added that the cumulative from rest of the sugar producing states will stood at 5.2 mt.
As per contracts signed so far, sugar mills will make 61.63 crore litres and 10.6 crore litres of ethanol from B-heavy molasses and cane juice, respectively. Another tender is under finalisation which will further increase ethanol supplies.
ISMA also added that it is hopeful that the government will continue to keep a buffer stock of 4 mt next year, too, making the net available sugar balance for market sale around 6 mt, which it termed “reasonable”.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.