Commodity News

Sugar Production could Drop in 2019 due to Water Scarcity

Sugar production in India could drop in 2019-20 as the farmers are struggling to sow cane due to drought in two of the country's main producing states, informed multiple industry officials and traders.

A drop in output would cut exports from the world's second-biggest sugar producer and support global prices that have plunged 15% so far in 2018.

MD of National Federation of Cooperative Sugar Factories Ltd, Prakash Naiknavare said, “Many growers could not sow cane in Karnataka and Maharashtra due to water shortage, which will reflect in next year's production”.

Cane is a perennial crop that is reaped 10 -16 months after planting. Maharashtra is the India’s second-biggest sugar producer, whereas Karnataka ranks third.

Naiknavare said India's output in the upcoming 2019-20 marketing year could drop to between 28 and 29 million tonnes (mt) from the current year's estimated 31.5 to 32 mt.

In Maharashtra's, the production could drop 16.7% to 7.5 mt in the next season, he added. It must be noted that the sugar marketing year begins from October to September. The state received 23% less rainfall than normal in 2018 (June to September monsoon season), whereas the shortfall in Karnataka's cane growing region was 29%.

B B Thombare, managing director of Natural Sugar & Allied Industries said productivity may go down by half in Maharashtra's Marathwada region, where people struggle to secure drinking water.

Not only water scarcity but an infestation of white grubs will also limit production in the next season.

Sanjay Khatal, managing director of the Maharashtra Co-operative Sugar Factories Federation said that farmers are deracinating ratoon crop because of the white grub infestation and water scarcity.

After record production in 2017-18, sugar mills were struggling hard to export the surplus and asked government’s assistance for overseas sale and to support local prices. A Mumbai-based dealer with a global trading firm said a drop in sugar production could lift local prices and prompt government to stop export incentives.



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