Sugar industry optimistic for next season with normal monsoon forecast

While Skymet and the Indian Meteorological Department (IMD) predict a normal monsoon in 2022, the sugar industry is hoping for another bumper harvest next season (October-September), at least at the same level as the current year. However, sugarcane plantings over the next couple of months will be crucial in estimating crop prospects.

“Although it is hard to say anything at this stage but the forecast of a normal monsoon means there is no reason for India not to produce the same level of sugar production next season as well,” said Ravi Gupta, chairman of the export and ethanol committee. Indian Sugar Trade Association (AISTA). India’s sugar production is estimated at around 34.5 million tonnes (mt) for the 2021-22 season, he said.

According to the IMD forecast released on April 14, India will receive normal rainfall, quantitatively 99% of the long-range average (LPA) of 87cm during the monsoon season from June to September, accounting for 75% of annual rainfall of the country. 116 cm. This year, private meteorologist Skymet also predicted a normal monsoon, 98% LPA. Precipitation between 96% and 104% of the LPA is considered “normal” in meteorological terms.

However, while the IMD sees the chance of a normal monsoon at 40%, Skymet said it was 65%.

Export outlook

Gupta also said the country’s sugar exports could reach 6.8 million tonnes by the end of this month from 5.7 million tonnes in the first six months (October-March).

“Since overseas markets are good, it’s time to export excess production. Currently, the export rates offered by foreign buyers are higher than our production costs and this opportunity should be taken as much as possible for export,” he said. Activity area in an interview. Since the country has more surpluses with increased production, it is better to export the surplus as soon as possible so that stocks are brought back to the optimal level, 6-6.5 tons, he added. .

However, the longer term solution for India is balanced sugar production and more and more ethanol; he highlighted and credited the government for pursuing a stable policy for the sector.

Ethanol program

Asked about the case of the ethanol program if there is a year of monsoon failure, Gupta said, “Any agriculture-based program will have to take into account weather vagaries. But it’s not that a failed monsoon will lead to shortages. This (lower rainfall) can reduce the sugarcane harvest by a certain percentage, but cannot wipe out the harvest.

He also said the sugar surplus is estimated at around 7 tonnes after taking into account 27.5 tonnes of domestic consumption. In addition, sugar cane diverted for ethanol could have produced an additional 3.2 tonnes of sugar, on top of the current production estimate of 34.5 tonnes. “The surplus is so huge that there will be no worries about the availability of sugar for the domestic market. Even for ethanol there will be no problem (in any bad monsoon year),” Gupta said.

Rod pricing

On the controversial issue of cane pricing, he said, “the best pricing policy is the revenue sharing formula because it makes farmers partners in the sector’s growth story.” Private sugar mills, particularly in Uttar Pradesh’s biggest producer, are complaining about the higher price of cane they pay farmers. The state government sets a separate rate, above the Centre’s fair and remunerative price (FRP).

Published on

April 16, 2022

Rachel J. Bradford