Sugar output in Maharashtra seen down 25 per cent y/y

Sugar output in top producingMaharashtra state is likely to fall by 25 percent year-on-year to 6 million tonnes in 2013/14 as drought reduced the acreage under the crop, a state official said.

The sharp drop in output in the western state will bring down the country’s total sugar production and could lead to higher imports in the 2013/14 marketing year starting Oct. 1.

After a drought in 2009, sugar production fell sharply, forcing India to make big purchases from overseas markets and pushing the price of raw sugar futures to 30-year highs.

“Considering the impact of drought on acreage, we estimate production of 6 million tonnes for the 2013/14 season,” D.B. Gavit, a director at the Sugar Commissioner’s office, told Reuters.

Maharashtra produced 8 million tonnes of sugar in the 2012/13 season. India’s overall production was 24.6 million tonnes against local demand of around 23 million tonnes.

India is likely to import 1.5 million tonnes of sugar in 2012/13, including 500,000 tonnes for local consumption and the rest for re-export despite the surplus produce, as local prices are much higher than overseas prices.

India’s sugar exports in the current year are around 50,000 tonnes, sharply down from 3.5 million tonnes a year earlier.

Sugarcane acreage in Maharashtra stood at 511,000 hectares as on June 5 compared with 945,000 hectares a year earlier, farm ministry data showed.

“The ongoing rainfall is good for the crop, but it can’t increase the area for the 2013/14 season. The crop planted in the next few months would be available for crushing only in 2014/15,” said Gavit.

Sugarcane is a perennial, water-intensive crop and is usually harvested 10 to 16 months after planting. Cane for the crushing season starting Oct. 1 has been planted, but half the total acreage was short of water during April and May.

In the last week, the cane crop in the drought-affected state received ample rainfall as this year’s monsoon arrived on time and is expected to bring average rainfall.