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Sugar production may hit three-year low in 2019-20: Isma forecast

FE Bureau
Sugar production, Maharashtra, Isma, sugar season, Maharashtra, sugarcane juice, Bijapur districts

Sugar production in the 2019-20 season is expected to hit a three-year low and decline by 19% to 26.85 million tonne as compared to 33.16 million tonne in the previous season, Indian Sugar Mills' Association (Isma) said on Tuesday, blaming erratic rainfall and floods in Maharashtra and Karnataka, the two main cane growing states, for the decline in total cane acreage.

Production in 2017-18 was 32.45 million tonne. Isma, which had earlier released preliminary estimates of sugar production at 28.20 million tonne for sugar season 2019-20, has lowered its figures on sugar production for the season after considering the estimates on sugarcane acreage, yields, recovery, cane drawal, rainfall and other factors.
In July 2019, Isma had released its preliminary estimates of production at 28.20 million tonne for sugar season 2019-20, based on the first survey of satellite mapping carried out in June, assuming normal monsoon in 2019.

The total production during sugar season 2019-20 would be around 26.85 million tonne, without considering the impact of sugar reduction due to diversion of B heavy molasses/sugarcane juice to ethanol, said the apex body.
The crop in Maharashtra and Karnataka, which contributes around 35-40% of the country's total sugar output, has been adversely impacted due to various reasons. The total cane acreage may decline by 12% to 48.31 lakh hectare as compared to 55.02 lakh hectare in the last sugar season (2018-19), Isma said in a statement.

Isma said sugarcane acreage in Uttar Pradesh, another leading sugarcane and sugar producing state, is seen to be slightly lower as compared to sugar season 2018-19. Taking into account the crop condition, weather conditions and area under the high yielding cane varieties in the state, an improvement in yield per hectare is expected. Hence, production in UP in sugar season 2019-20 is estimated to be around 12 million tonne, which is more or less at the same level of 11.82 million tonne in 2018-19.

As per preliminary estimates in July 2019, cane area of Maharashtra was seen lower by about 30% for sugar season 2019-20, on account of drought last year in Marathwada and Solapur. Floods affected cane growing areas like Kolhapur, Sangli, Satara and Pune in August and September.

Due to water logging in cane fields for long duration, some of the cane has been destroyed completely, while some areas have been partially affected in terms of yield and recovery. Hence, cane area for 2019-20 harvesting has further dropped to 7.76 lakh hectare, against what was reported about four months back. It is, thus, about 33% less than last year's acreage of 11.54 lakh hectare.

Taking into account all the above factors, production is estimated to drop by almost 40% to around 6.2 million tonne in sugar season 2019-20 as against 10.72 million tonne produced in sugar season 2018-19. In Karnataka, just like Maharashtra, there was poor rainfall in 2018 in cane growing areas, reducing the acreage for sugar season 2019-20. Further, incessant rains in first fortnight of August 2019 affected area in Belgaum and Bijapur districts. Thus, area under sugarcane in sugar season 2019-20 is expected to be about 3.99 lakh hectare as against 5.02 lakh hectare in sugar season 2018-19, which is lower by about 21%. Considering the various factors, production in sugar season 2019-20 is estimated to be around 3.2 million tonne as against 4.43 million tonne in sugar season 2018-19.

According to Isma, other sugarcane growing states are expected to collectively produce about 5.45 million tonne in sugar season 2019-20, almost at the same level as in the previous season.

The tender for ethanol procurement for sugar season 2019-20 is expected to be opened by the OMCs shortly. As per informal reports, this year the bid for ethanol produced from B heavy/sugarcane juice would be higher. As per market information, it is estimated that around 8.5 lakh tonne less sugar will be produced because of the diversion of cane juice and B-molasses into ethanol.