Deficient monsoon to hit sugar output

Dilip Kumar Jha & Sharleen D'Souza / Mumbai Jul 03, 2012,
Business Standard
Sugar output is likely to decline by four per cent in the coming season, on lower recovery from the standing cane crop, due to deficient monsoon rainfall.

According to the latest forecast by the Indian Sugar Mills Association (Isma), total sugar output might decline to 25 million tonnes during the crushing season beginning October, marginally lower than the current year’s estimated production at 26 mt. At the start of the sowing season, many experts had estimated a bumper output again this year, after excessive production in successive seasons. Sugar season 2010-11 and 2011-12 saw 24.7 mt and 26 mt, respectively. Earlier, analysts were forecasting a little over 27 mt of output during 2012-13.

The southwest monsoon in June has delivered 31 per cent less than the long-term average rainfall, resulting in paucity of moisture and excess of sunshine, both harmful for germination, plant growth and accumulation of sucrose (sweetener) content in the standing cane crop.

“The monsoon period in June and July is crucial for the overall growth of the sugarcane plant. Lack of water and excessive sunshine affects overall germination and sucrose accumulation in cane,” said Abinash Verma, secretary general of Isma. The India Meterological Department has forecast a normal monsoon in July and August; however, it had made the same prediction for June, too.

“Although, this is a very preliminary estimate, we see a negative impact on the overall output next season. Hence, we have cautiously estimated the overall output at 25 mt for the marketing season 2012-13,” said Verma.

India’s cane crushing season begins in October. Actual crushing often sometimes starts only by mid-November, sometimes because of the delay in announcing a State Advised Price by the government of Uttar Pradesh and also due to delay in harvesting of cane, on abnormally high moisture in the field due to prolonged monsoon rain. Crushing ends in most states in May, while the activity continues with late season cane in Tamil Nadu and Andhra Pradesh.

However, even with 25 mt of annual production, India needs to export around three mt, as the estimated domestic consumption would be 22 mt. The surplus needs to be exported, said Verma, despite downward sentiment in the global market.