India’s sugarcane industry is bracing for significant changes in the upcoming season as fluctuating weather patterns affect production in key states. Here is a breakdown of the latest developments and challenges facing the Indian sugar sector:
Sugarcane Production in Karnataka and Maharashtra Under Pressure
Karnataka, one of India’s major sugarcane growing states, is expected to witness a nearly 30% decline in sugarcane production during the upcoming season due to a deficit in rainfall. Neighboring Maharashtra is also likely to experience a 10-20% reduction in cane production due to erratic rains. However, it is important to note that Uttar Pradesh’s sugarcane production remains unaffected in the current season (October 2023-September 2024).
Anticipated Drop in Sugar Production
Various agencies estimate a decrease in sugar production for the upcoming season. The Indian Sugar Mills Association (ISMA) suggests that the area under sugarcane cultivation is expected to be 57 lakh hectares, with total sugar production projected to be 33.7 million tonnes in the 2023-24 sugar season. Fortunately, this production appears to be sufficient to meet India’s domestic consumption, which averages around 27.8 million tonnes.
Agrimandi.live Research House Projections
Agrimandi.live Research House predicts a 9.4% drop in total sugar production and a 2.9% increase in sugar consumption for the current year compared to the previous sugar season.
International Sugar Price Trends
According to the OECD-FAO Agricultural Outlook 2023-2032, international sugar prices rebounded after reaching a 16-month low in October 2022. This rebound is primarily attributed to tight global sugar supplies and strong global import demand. Sugar production is expected to decline in India and the European Union due to factors like lower sugar beet plantings and yields.
Challenges and Policy Requirements
Despite a projected drop in sugar production, there is assurance of sufficient supply to meet domestic demand. However, the Indian sugar sector faces the need for long-term policy decisions to ensure stability for all stakeholders.
Export Restrictions and Ethanol Production
In recent years, the Indian government restricted sugar exports due to domestic price fluctuations and increasing international prices. This move impacted sugar mills, especially as they awaited ethanol price announcements for the current season.
Demand for Fair and Remunerative Price (FRP)
In Karnataka, sugarcane farmers are calling for a Fair and Remunerative Price (FRP) of ₹4,000 per tonne, considering the cost of cultivation and lower sugar recovery rates. They also seek support for those who suffered crop losses due to unfavorable weather conditions.
The Way Forward
Aditya Jhunjhunwala, president of ISMA, highlights the priority areas for sugar mills, which include domestic supply, ethanol production, and exports. To provide stability and facilitate long-term planning, the industry seeks a consistent ethanol pricing formula.
The Indian sugarcane sector faces challenges and uncertainties in the upcoming season, necessitating government interventions and policy adjustments to ensure a balanced and sustainable industry.