Sugar output seen jumping in key Indian producing state

Friday, 21 April 2017 00:00 - - {{hitsCtrl.values.hits}}

MUMBAI (Reuters): Sugar output in Maharashtra, one of India’s key producing states, will likely jump nearly 70% in 2017/18 to seven million tons as ample rainfall drives farmers to plant more cane, an industry body told Reuters.

That jump would help push the country’s overall sugar production back near consumption levels after a drop expected in the current crop year, ending Sept. 30, in the wake of a strong El Nino weather pattern that prompted severe drought.

Increased output in the world’s top consumer of sugar, used to prepare everything from sticky desserts to sweets bought as treats during festivals, could sap demand for imports, dragging on international prices that are already trading near their lowest in 10 months.

“Farmers have raised area under cane for the next season as rainfall was satisfactory across the state,” said B.B. Thombre, president of industry body the Western India Sugar Mills Association (WISMA), forecasting the climb in output to seven million tons.

“India will produce enough sugar next season to fulfil local consumption.”

Back-to-back droughts look set to curb Maharashtra’s production to 4.2 million tons in 2016/17 from 8.41 million tons the year before, with Indian output expected to plunge 19% to 20.3 million tons. That would put the nation’s production below consumption levels of around 25 million tons for the first time in seven years.

“This year production fell due to poor yields. Next year we are expecting improvement in yields,” said Sanjeev Babar, managing director of the Maharashtra State Co-operative Sugar Factories Federation, a body for co-operative mills.

India is forecast to receive average rainfall in 2017.

Farmers have also been switching back to growing sugarcane after a drop in prices for oilseeds and pulses dented the appeal of sowing those crops, said Nitin Kalantri, a pulse miller in Maharashtra, in west India.

That means that imports could decline, hitting major suppliers such as Brazil and Thailand, which have this year been benefiting from New Delhi’s decision to allow duty-free imports of 500,000 tons of raw sugar.

“We will have ample domestic supply next season. We may not need imports,” said Balasaheb Patil, chairman of the Sahyadri co-operative sugar factory in Maharashtra.