Sugar production in the ongoing season (2022-23) may be only marginally lower than last year, and that should not cause any alarm, a section of the industry has said. It added that a clearer picture should emerge by early January as crushing picks up.
In the 2021-22 season that ended in September, sugar production — after accounting for diversion towards ethanol — was estimated around 35.9 million tonnes. This year, initial reports indicated that production could be around 36.5 million tonnes. Now, a section of the industry feels it could be closer to 35 million tonnes.
Industry players said the prime reason for a slight drop in output is due to the fact that the sugarcane crushing season started late. This is because of an extended monsoon that caused loss of weight in sugarcane and also some drop in recovery.
“The ground reality is that the sugar season across the country started late by about two-three weeks due to the prolonged monsoon. In addition, the announcement of the new sugar export policy of the Centre was delayed by almost a month. This, along with the severe cold weather at the beginning of the season that disappeared later, is prompting some experts to predict a decline in sugar production,” a statement by the National Federation of Cooperative Sugar Factories (NFCSF) had said.
That time, the federation had predicted no decline in production. However, sources said that after the latest crushing numbers, there is some rethink on the output by some major industry players.
“The drop in production, according to my estimates, will not be more than 0.9-0.95 million tonnes, which is 2-3 per cent less than last year. Of this, around 0.4 million production loss is expected in Maharashtra and a similar fall in UP and Karnataka. However, there would be some increase in output in Tamil Nadu and Haryana. This, in the final analysis, will come to around 2-3 per cent fall,” a senior industry executive said.
Till November-end, according to the NFCSF, sugar production was up by almost 6.38 per cent compared to last year, while the average recovery was down nearly 10 per cent from last year.
According to Indian Sugar Mills Association (ISMA), sugar production till November 30 was estimated to be 4.79 million tonnes. During the same period last year, it was 4.72 million tonnes, an increase of 1.48 per cent.
“I don’t expect any drop in production as of now. In fact, my estimate is that production will be higher. The late rains did cause waterlogging in some fields in Maharashtra and Karnataka. But the impact is yet to be assessed. A clear picture on production will come around the second half of January,” Atul Chaturvedi, executive chairman, Shree Renuka Sugars, told Business Standard.
India has targeted to blend over 10 per cent ethanol with petrol in 2022-23 Ethanol Supply Year. So far, till end-November, the oil marketing companies (OMCs) have floated tenders for supply of 4.60 billion litres of ethanol.