India’s sugar production has hit an all-time high of 355 lakh tonnes this year.
What is the trend with respect to sugar production this year?
After a five-year gap, Maharashtra has overtaken Uttar Pradesh (UP) to regain its position as India’s top sugar producer (138 lakh tonnes (lt)).
Karnataka and Gujarat has also made a remarkable production and has rebound from the drought-affected levels of 2019-20.
UP’s sugar output has fallen to a five-year-low in 2021-22.
However overall India has made a record production of 355.5 lt of sugar.
What are the reasons behind bumper production of sugar in Maharashtra?
Maharashtra has been receiving bountiful rainfall since the 2019 southwest monsoon season (June-September).
The filling up of reservoirs and recharged groundwater aquifers has induced farmer to plant more area under sugarcane which is a 12-18 months duration crop.
Increased cultivation of adsali variety and reduction in cultivation of suru. Adsali is an 18-month cane yielding more than the regular 12-month ‘suru’ and 15-month ‘pre-seasonal’ crops.
Increase in area of cultivation of sugarcane. There is a huge jump in “unregistered area” of cane cultivation. The mill owners peg that at least one lakh hectares (lh) haven’t got “registered” for supplying to any factory.
The unregistered area is mostly in the Marathwada region and the adjoining districts of Ahmednagar and Solapur.
This belt is most prone to drought. Neither the state’s revenue nor agriculture departments could assess the actual area planted.
Why there is a decline in production of sugar in UP?
Around 12 lt equivalent of sugar from cane crushed by mills are getting diverted for making ethanol this year, compared to 7.19 lt in 2020-21.
UP has in fact, become India’s largest ethanol producer, while also achieving the highest blending-in-petrol ratio among all states.
There is crop loss due to excess rains and water-logging in many low-lying cane-growing areas of eastern UP.
About 87% of UP’s cane area is planted under a single variety, Co-0238 which has become susceptible to red rot fungal disease. Replacing it with Co-0118 and Co-15023 variety resistant to red rot will improve the yield.
What the bumper production means for Mill owners and Consumers?
Despite UP’s sugar output falling to a five-year-low India has made a record sugar production of 355.5 lt.
Mill Owners - This meant that there is un-harvested cane still in the fields and mills in Maharashtra will continue to crush till the first week of June. In normal years, crushing operations are over by April-end.
Maharashtra government has announced a subsidy of Rs 20/quintal to compensate mills for lower sugar recovery from cane crushed in extreme summer heat.
Consumers – Bumper production usually results in price drop. Interestingly due to increased exports there is no price drop this year.
The export is likely to reach 100 lt in the current sugar year from 71.9 lt in 2020-21.
Is there a need to cap the exports?
With opening stocks of 85 lt on October 1, 2021, production of 355.5 lt, domestic consumption of 275-280 lt and exports of 100 lt, the year will close with 60.5-65.5 lt of sugar with mills. These stocks would suffice for over 2.5 months of domestic consumption.
Given the comfortable availability position, the Centre’s decision to cap sugar exports at 100 lt for 2021-22 has taken many by surprise.
