Explained: How Maharashtra overtook UP to reemerge as the top sugar producer

Maharashtra Sugar Commissioner Shekhar Gaikwad expects the state’s output for the 2021-22 (October-September) milling year to be 138 lakh tonnes (lt). This is an absolute record, beating the previous 107.21 liters from 2018-19.

Prakash Naiknavare, managing director of the National Federation of Cooperative Sugar Mills, attributes the record production to three factors.

The first is the abundant rains that Maharashtra has received since the 2019 southwest monsoon season (June-September). The filling of reservoirs and recharged underground aquifers has prompted farmers to plant more area under sugarcane, which is a 12-18 month crop. The benefits of abundant water and large area have fully increased in 2021-22.

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The second is higher yields from farmers who take better care of their crop. An example of this is Vinod Momale, who grows sugar cane on 11 of his total 40 acres in Gurdhal village of Latur district, Deoni taluka. He harvested an average yield of cane per acre of 60 tonnes this year, up from 50 tonnes in 2020-21.

“My five wells and my farm pond (which can store 1 million liters of rainwater) have been full for the past two years,” says the farmer, who grows soybeans on 15, tur (pigeon peas) on 8 and green fodder on his remaining land. Improved water availability, especially after the drought in early 2018 to mid-2019, also encouraged Momale to plant 5 acres under ‘adsali’, an 18-month-old cane yielding more than ‘suru ‘regular 12 months and 15 months ‘pre-season crops’. “It was the first time I took adsali (planted in June-July 2020) and reduced the area under suru (planted in December-January 2020-21). So my overall performance has increased,” he explains.

Top sugar producing states (in lakh tons)

Cane underreported

But there is a third factor for Maharashtra’s sugar production to reach a new high. It has to do with a huge leap in the cultivation of “unregistered” cane. In 2020-21, the state reported a total area of ​​11.42 lakh hectares (lh) planted under cane. While the Office of the Sugar Commissioner has estimated this year’s acreage at 12.4lh, millers are pricing it at least one lh higher – and it’s all cane that farmers haven’t ‘registered’ to supply to any factory.

The large ‘unregistered’ area means that there is still unharvested cane in the fields and the mills will continue to crush until the first week of June. In normal years, crushing operations are completed by the end of April and rarely extend beyond mid-May. This time the excess cane led the government of Maharashtra to announce a subsidy of Rs 20/quintal to compensate mills for less sugar recovery (from cane crushed in extreme summer heat) and also to requisition services mechanical harvesters (including other states).

The unregistered area is mainly in the Marathwada region and neighboring districts of Ahmednagar and Solapur. This is a belt, ironically, the most prone to drought. Neither the tax services nor the state agriculture departments have been able to assess the actual acreage planted with sugar cane – registered or not – thanks to successive good monsoons.

“The government says Maharashtra’s average cane yield has reached an all-time high of 105 tonnes per hectare, up from 85 tonnes in 2020-21. But yields can’t increase that much in a year, even if adsali’s share has gone from, say, 10% to 12%. The truth is that the area itself is underestimated by an lh-plus and appears in the unregistered cane that comes to us,” says a leading Ahmednagar-based miller.

The decline of the UP

It is not Maharashtra alone. Karnataka is also set to produce a record 60 liters of sugar this year, while Gujarat’s 12 liters would be the best since 2010-11’s 12.35 liters. As the table shows, production in the tri-states recorded a remarkable rebound from drought-hit levels of 2019-20, a year that actually saw UP hit a peak of 126.37 liters.

Bakshi Ram, former director of the Sugarcane Breeding Institute in Coimbatore, gives three reasons why UP sugar production declined after 2019-20.

The first is an estimated equivalent of 12.60 liters of sugar from cane crushed by mills diverted to make ethanol this year, up from 7.19 liters in 2020-21, 4.81 liters in 2019-20 and 0.31 liters in 2018-19. UP has in fact become India’s largest ethanol producer, while achieving the highest gasoline incorporation rate among all states.

The second is crop loss due to excessive rains and waterlogging in many low-lying sugarcane growing areas in eastern UP. The third reason is that approximately 87% of UP’s sugarcane acreage is planted to a single variety, Co-0238. While this variety, developed by Bakshi Ram, helped to significantly increase cane yields and sugar recovery in UP from 2013-14 (https://bit.ly/3GtmVO2), it became susceptible to the fungal disease red rot. “We recommend replacing it with two new varieties, Co-0118 and Co-15023, which are resistant to red rot,” the veteran breeder told The Indian Express.

Bumper production

UP’s sugar output falling to a five-year low in 2021-22, however, was more than offset by Maharashtra and Karnataka’s surge to historic highs. This then translated into a record production of 355.5 liters for India, according to Naiknavare.

But interestingly, it did not result in any price drop. “Ex-factory prices of S-30 (small crystal size) sugar in Maharashtra are now around Rs 32.5-33 per kg, while at Rs 34.5-35 for M-30 grades ( medium size) in UP, more than the government-fixed minimum selling price of Rs 31. In all previous cases of bumper production, prices have crashed,” Naiknavare notes.

The reason it’s not happening this time around is exports. These exceeded 75 liters – surpassing the 2020-21 record of 71.9 liters – and are expected to reach 100 liters in the current sugar year. With opening stocks of 85 liters as of October 1, 2021, production of 355.5 liters, domestic consumption of 275-280 liters and exports of 100 liters, the year will end with 60.5-65.5 liters of sugar with mills. These stocks would suffice for more than 2.5 months of domestic consumption.

Given the comfortable availability position, the Centre’s decision last week to restrict sugar exports and cap them at 100 liters for 2021-22 took many by surprise. But one thing is clear: Maharashtra and Karnataka have ensured that sugar does not go the way of wheat this year.

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Rachel J. Bradford