India, is likely to have a surplus of sugar production for the sixth straight year despite erratic rainfall. Preliminary forecast by the Indian Sugar Mills Association (ISMA) says, sugar output in the world’s second-largest producer is expected to touch 28 million tonne this year when compared with an eight-year high of 28.30 million tonne. Consumption is expected to go upto 25.2 million tonne in 2015-16, up from roughly 24.50 million tonne.
"It is estimated that 252 lakh tons of sugar will be consumed in next season. During this SS 2014-15 SS, till June 30, 2015, about 280.23 lakh tons of sugar have been produced and another 2.5 lakh tons is expected to be produced in the balance period of the season," stated the Indian Sugar Mills Association release.
“This preliminary estimate of sugarcane crop and production is on the current monsoon progress, water situation and other fundamental factors across India,” said an Indian Sugar Mills Association statement. The association is expecting a better yield and expects sugar output in UP for the 2015-16 season to be 73.5 lakh tones, 3.5 percent higher than the 71 lakh tones produced in 2014-15.
Karnataka, which had high production of sugar of 49.6 lakh tons in 2014-15 sugar season, is expected to have higher acreage of 5.14 lakh hectares in the year 2015-16 sugar season. Sugarcane condition and cropping pattern, gives an indication that sugar production will be about 49.8 lakh tons for the year 2015-16.
Due to the lesser rainfall and drop in cane area as compared to previous years, cane acreage in Tamil Nadu will remain at the same level of 2014-15 sugar season at 2.5 lakh. However, it is expected that the yield may improve slightly in 2015-16 sugar season. Sugar production in Tamil Nadu is expected to be around 12.7 lakh tons in 2015-16 sugar season.
Production of top producing Maharashtra could drop to 7.6 percent to 9.7 million tonnes due to scanty rains in cane growing areas. ISMA is anticipating a better yield in the year 2015-16 SS, which may increase the sugarcane production and availability for crushing by sugar mills. Based on the satellite images procured in the latter part of June 2015 the total acreage in the country is of around 53.58 lakh hectares in 2015-16 sugar season, which is almost similar to that of last year of 2014-15 sugar season, when it was 53.23 lakh hectres. The first advance estimates will be released in September 2015, when satellite images will capture fully matured crop.
The surplus production could bring down local prices and increase losses of debt-ridden sugar mills, prompting the country to maintain exports to trim rising inventory.