India seen producing a surplus crop during two years

Published: 10/06/2017, 5:51:07 PM

India is likely to witness surplus sugar production during the next two years on account of a bumper sugarcane crop, according to India's Hindu BusinessLine newspaper.

According to OP Dhanuka, CMD, Riga Sugar Company Ltd, production of sugar in 2017/18 marketing year (October-September) is likely to be close to 25.5 million tonnes, a growth of 25% over last year on higher sugarcane area. The country's annual consumption is pegged at 24 million tonnes.

It is estimated that the area under sugarcane cultivation is higher at 4.988 million hectares this year compared to 4.564 million hectares in 2016/17.

"The rains have been favourable to us; with the kind of rains we have seen in 2016 after two consecutive years of drought, India is likely to produce a bumper cane crop during the next two years," Dhanuka told BusinessLine.

While production in Uttar Pradesh is expected to be higher by 19% at 10.5 million tonnes (8.8 million tonnes) this year, Maharashtra and Karnataka, which had witnessed a steep decline in production in 2016/17, are also expected to be on the path to recovery, he said.

Maharashtra's production, which came down to 4.2 million tonnes in 2016/17 from 8.4 million tonnes in 2015/16, is expected to increase to 8.4-8.5 million tonnes this year. Karnataka is also expected to see its production rise by over 80% to 4 million tonnes this year, he added.

The industry has a carryover stock of close to 5 million tonnes as on September 30. This apart, the Indian Sugar Mills Association has allowed imports of close to 500,000 tonnes of sugar this fiscal as a cushion to mills in Maharashtra and Karnataka, which have been reeling under the pressure of acute cane shortages resulting from drought in the past two seasons.

"We are quite comfortable on the stock front to see us through during the festive months of October and November. Mills in Uttar Pradesh and Karnataka will start their crushing operations soon, assuring that enough new season sugar starts flowing into the market," he said.

With the production of sugar worldwide and in India estimated to be higher than previous years, the government should plan in advance to avoid dumping of sugar from sugar-producing countries.

"The government should allow the market forces to play by allowing timely import or export of sugar, as the case may be, so as to manage prices," he said.