Indian sugar production estimate at 23.5 million metric tonne, down 6.5% year on year: Platts

KOLKATA: With less than a month before the start of the 2016-17 season in India, Platts is keeping the Indian sugar production estimate at 23.5 million metric tonne, down 6.5% year on year throughout the off crop period. The southwest monsoon, which is in the withdrawal phase, is 5% below the Long Period Average (LPA) at 794 millimeters over June 1-September 19 and can be

termed a “normal” monsoon. It was forecast to be above-normal by the Indian Meteorological Department at 106-107% above the LPA at the start of the year. The largest sugar-producing state of Maharashtra has received 746.4 mm of cumulative rain, which is 12% above the LPA. This is good for boosting yields, even to some extent in the ratoon crop available for harvest during 2016-17. So we are maintaining our estimates for sugar production in the state at 6.5 million metric tonne, down 23.5% year on year. Our estimates do factor in much of the yield reduction that has already happened due to the drought over the last two seasons.

North Karnataka, which borders South Maharashtra and shares similar soil and climatic conditions, has also received cumulative rain 4% above the LPA and so we are keeping our production estimate at 3.6 million metric tonne North Karnataka accounts for 80% of the acreage and production in the state. For Maharashtra and Karnataka our agricultural yield estimates are 70 mt/ha and 71 mt/ha respectively, both down 13% and 10% year on year.

In Uttar Pradesh, cumulative rain is 15% below the LPA at this stage but parts of eastern UP did receive heavy bouts of rain along the border with Bihar, which experienced floods during August. Whenever such weather is seen, it usually translates into lodging of cane in these areas due to loose soil. Agronomists at this stage estimate the amount of cane loss due to this weather at 3%-5% of the cane acreage in eastern UP, although our estimates at this stage do not factor in any loss of cane. We expect overall cane availability for the state of 78 million mt and sugar production of 7.4 million metric tonne. We estimate eastern UP to have a 30% share of cane acreage and 24% share of cane availability.

Tamil Nadu’s production during 2016-17 is estimated to rise 39% year on year to 1.8 million mttq. Unlike other sugar-producing states, Tamil Nadu gets both the South-West (June-September) and the North-East (October-December) monsoons and hence is able to plant and harvest cane throughout the year. Given that the state had good rains in early 2016 during the planting period, production estimates for 2016-17 were was always high. Cumulative rain in the state currently stands at 239.4 mm, which is 11% below the LPA. 

Indian sugar production estimate at 23.5 million metric tonne, down 6.5% year on year: Platts