INDIA: 2018/19 crush could be records near 30 million tonnes

Published: 11/09/2017, 7:52:05 AM

Though these are early days, yet there is a section within the Indian sugar industry that has already started talking of a record sugar production of almost 29-30 million tonnes in the 2018/19 crop marketing year that will start from October next year, according to India's Business Standard newspaper.

The estimate is based on the standing sugarcane crop estimates in some states and also planting intention by farmers.

This, if true, would not only be one of the highest ever sugar production levels seen in India, but it will also be almost 4-5 million tonnes more than the production levels of 2017/18, which is projected at 25 million tonnes.

A section of the industry feels that a good retreating monsoon this year, coupled with stable prices for farmers would encourage them to plant more crops.

"The retreating monsoon this year has been good in parts of Maharashtra after two consecutive years of low rains, while in Uttar Pradesh the high-yielding C0-238 variety is expected to cover almost 80% of the planted area, which should itself lead to a significant rise in sugar production," said Prakash Naiknavare, managing director of National Federation of Cooperative Sugar Factories Ltd.

He said that the overall crushing capacity of the sugar sector is also expected to go up significantly as the 80 closed cooperative sugar factories will become operational in the coming months.

Of this, around 40 sugar factories are in Maharashtra, while another 30 are located in UP.

"Though we haven't yet assessed the crop estimate for 2018/19, yet whatever information we have from the market, it does point towards a rise in production in 2018/19," said R P Bhagria, chief executive officer of All India Sugar Trade Association.

In UP, the high-yielding Co-238 variety not only gives a higher per hectare yield but its average sugar recovery is also more than existing varieties. Moreover, the variety is expected to occupy almost 80% of the total planted area, as a result of which the overall sugar production is projected to increase.

UP surpassed Maharashtra to become India's foremost sugar producing state and it is likely to maintain this lead for the next two years. All thanks to the new variety.

The price realised from sugarcane for farmers in 2017/18 is also expected to be better than other crops as the UP government has raised the State Advised Price (SAP) of sugarcane by INR10 (US$0.15) per quintal for both common variety and early maturing varieties at INR315 per quintal and INR325 per quintal respectively.

The Central government too has raised the Fair and Remunerative Price (FRP) of sugarcane for 2017/18 season by INR25 per quintal to INR255 per quintal, while for the 2018/19 season, it is expected to be increased by another INR20 a quintal.

The expected bumper harvest has once again reignited calls for devising plans to ensure the absorption of surplus production. If estimates are correct, then India might have a surplus of almost 4-5 million tonnes of sugar by the end of 2018/19 season.