Lower area and drought will see India, the world's top consumer and the biggest producer of sugar after Brazil, fall severely short of domestic consumption for a second straight year in 2009/10, a Reuters poll showed. The poll of 10 respondents, including Indian millers and commodity brokerages, forecast an average estimate of 15.3 million tonnes for the sugar year, a little more than last year's output of 15 million tonnes, and much below 2007/08's 26.3 million tonnes.
The country's output stagnated as farmers failed to raise acreage. "Last year cane prices were not attractive. Farmers were not interested in cane. They preferred other crops like wheat," said Ashok Jain, president of the Bombay Sugar Merchants Association.
Cane acreage in 2009/10 eased by 3 percent to 4.250 million hectares, latest data with farm ministry showed. Cane is a perennial crop and is harvested in cycles of 12-14 months. "Now prices are attractive, but this year's plantation will come for harvesting only next year," Jain added.
India's cane area contracted for two consecutive years because of low prices and a drought, but Farm Commissioner N.B. Singh said late monsoon rains would ensure a steady cane output. However, the deficit will keep sugar prices firm in domestic market and force imports of sweetener, said Sanjay Tapriya, director, Simbhaoli Sugars Ltd.
But, output forecasts have often gone wrong in India. For example, in 2008/09, millers had forecast an output of 22 million tonnes, but it fell short by about 7 million tonnes. The same year India imported 5 million tonnes of raws - the amount it exported a year ago.
Rains were patchy over growing regions in the first two months of the July-September monsoon, but improved in the later half. "Poor monsoon rains remains a concern in Uttar Pradesh, but that loss should be compensated by Tamil Nadu and Karnataka," Prakash Naiknavare, managing director, Maharashtra State Co-operative Sugar Factories Federation Ltd, said.
The weakest monsoon in more than three decades hit the crop in Uttar Pradesh, India's second biggest sugar producer. Millers are set to begin crushing only next month to ensure maximum recovery - amount of sugar produced from cane - but this too can affect sugar output.
"We should keep an eye on jaggery makers. If mills delay crushing, it will increase diversion of cane for jaggery and ultimately will hit the sugar output," Mehul Agrawal, an analyst with Sharekhan Commodities, said. Jaggery, or gur, is a coarse sweetener.
Comments
Comments are closed.