In July 2019, ISMA had released its preliminary estimates of sugar production at 282 lac tons for 2019-20 SS, based on the first survey of satellite mapping carried out in June 2019, assuming normal South West Monsoon in 2019. Also, diversion of B-heavy molasses and sugarcane juice was then not considered for their impact on sugar production.
The second set of satellite images of sugarcane crop acreage across the country has been procured in the latter part of October 2019. Considering the estimates of sugarcane acreage, yields, recovery, cane drawal, rainfall and other relevant factors, ISMA has now reviewed its first advance estimates of sugar production for 2019-20 sugar season.
On the basis of the October 2019 satellite images, ISMA has now estimated the total cane acreage at 48.31 lakh hectares, which is about 12% less than 2018-19 SS on pan India basis of 55.02 lac ha.
As per satellite images of October 2019 and the fact that we did not have normal rainfall, Sugar production during the current 2019-20 SS is expected to be lower than what was expected about 4 months back. The crop in the two main sugarcane growing States, namely, Maharashtra and Karnataka which contribute around 35 - 40% of the country’s sugar, have been adversely impacted due to various reasons.
The sugarcane acreage in Uttar Pradesh, the leading sugarcane and sugar producing State in the country is seen to be slightly lower, as compared to 2018-19 SS. 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, sugar production in U.P. in 2019-20 SS is estimated to be around 120 lac tons, which is more or less at the same level of 118.21 lac tons produced in 2018-19 SS.
As per preliminary estimates in July 2019, cane area of Maharashtra was seen lower by about 30% for 2019-20 SS, on account of drought last year in Marathwada and Solapur.
Floods affected important cane growing areas Kolhapur, Sangli, Satara and Pune in August – September 2019. 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 lac hectare, against what was reported about 4 months back. It is thus about 33% less than last year’s acreage of 11.54 lac ha.
Some sugarcane fields in uplands will benefit in terms of yield per hectare as well as recovery, due to better water availability therein during the very important grand growth period. Taking into account all the above factors, sugar production is, therefore, estimated to drop by almost 40% around 62 lac tons in 2019-20 SS, as against 107.20 lac tons produced in 2018-19 SS.
Similar to Maharashtra, there was poor rainfall in 2018 last year in the cane growing areas of Karnataka, reducing the acreage therein for 2019-20 SS. Further, incessant rains in 1st fortnight of August, 2019 also affected the area contiguous to Maharashtra i.e. North Karnataka mainly in Belgaum and Bijapur Districts.
Thus, the area under sugarcane in 2019-20 SS is expected to be about 3.99 lac. ha as against 5.02 lac ha. in 2018-19 SS, which is lower by about 21%. Considering the various factors as stated above, sugar production in 2019-20 SS is estimated to be around 32 lac tons, as against 44.30 lac tons produced in 2018-19
There has not been any major changes in the other sugarcane growing States of the country. The rainfall therein has been more or less as expected. Hence, these States are expected to collectively produce about 54.5 lac tons of sugar in 2019-20 SS, almost at the same level as in the previous season. Therefore, the total sugar production during 2019-20 SS would be around 268.5 lac tons without considering the impact of sugar reduction due to diversion of B heavy molasses/ sugarcane juice to Ethanol.
The tender for ethanol procurement for 2019-20 SS is expected to be opened by the OMCs very shortly. As per informal reports, this year the bid for the Ethanol produced from B heavy/sugarcane juice would be higher. As per market information, it is estimated that around 8.5 lac tons of less sugar will be produced because of the diversion of cane juice and B-molasses into ethanol. Therefore, the resultant sugar production estimates for 2019-20, after considering this diversion into ethanol, will be around 260 lac tons of sugar. The exact diversion can be better determined once the bids are opened by the OMCs and, therefore, if required, ISMA can revise the figures.
The sugarcane crushing for the season 2019-20 is soon starting in some areas. Therefore, a better picture would emerge once the crushing starts fully and actual trend of yields and sugar recoveries would become available. As has been the practice, if required ISMA will once again revisit the sugarcane and sugar production estimates in January 2020, when the trends of the above are available.
Sugar production during 2018-19 sugar season was 331.61 lac tons. As per reports submitted by the sugar mills to the Government, sugar sales during 2018-19 sugar season was 246 lac tons. It has been seen that there are some sugar mills which sell more than the monthly sale quota given by the Government to them, for various reasons including the pressure to pay cane price to the farmers and also because huge working capital is blocked in the high sugar inventory. There are reports from the market that another 8-9 lac tons of sugar would have got sold over and above what has been reported by them to the Government. Therefore, the sugar sales by the sugar mills during 2018-19 season is estimated to be 255 lac tons.
Considering the opening balance of 107 lac tons as on 1st October 2018 and sugar and exports of around 38 lac tons and sugar sales of 255 lac tons, the closing balance as on 30th September 2019 is estimated to be 145.81 lac tons.
Against the new export policy of MAEQ of 60 lac tons, several sugar companies have already finalized contracts for exports and in the month of October 2019 alone, it is learnt that about 7 to 8 lac tons of sugar exports have been contracted far.
