Monsoon delay could push down sugar output
Sugar production in the forthcoming season, 2008-09 (October-March) is expected to be 25% lower than the current year’s, according to very early estimates by several agencies.
By TNN |
PUNE: Sugar production in the forthcoming season, 2008-09 (October-March) is expected to be 25% lower than the current year���s, according to very early estimates by several agencies which have submitted their reports to the central government.
The all India sugar production for the 2007-08 crushing season, which is now winding down, is pegged at 265 lakh tonne, while production for 2008-09 season is expected to be 225 lakh tonne, a 25% fall. However, the monsoon could play an important role in the output and subsequent actions by the government.
The first impact of a fall in the estimated sugar production is expected to be the unbundling of the 30 lakh buffer stock created by the central government last year, to help mills with unsold stocks since the market price was low.
However, it is the next step which could cause concern. Should the monsoon be poor, combined with the projected 25% drop in sugar production, the central government could step in and ban exports.
���Across the country there will be lower acreage under sugarcane for the forthcoming season, which means lower production. Most of the 40 lakh tonne shortfall is likely to be in Maharashtra,��� an industry source said, on condition of anonymity.
Maharashtra���s sugar production is already at 88.5 lakh tonne for 2007-08, with expectations that it will fall by 25-30% in the next season.
���The norm for sugarcane cultivation is that 70% acreage consists of new plantation while 30% is from rattoon (left over stalks from previous sowing). For 2008-09, we believe this will be reversed, which will mean that yield will be lower in the rattoon although recovery will be higher. The 30% new plantation will have a higher yield but that depends on the monsoons,��� Mr Devara said.
The all India sugar production for the 2007-08 crushing season, which is now winding down, is pegged at 265 lakh tonne, while production for 2008-09 season is expected to be 225 lakh tonne, a 25% fall. However, the monsoon could play an important role in the output and subsequent actions by the government.
The first impact of a fall in the estimated sugar production is expected to be the unbundling of the 30 lakh buffer stock created by the central government last year, to help mills with unsold stocks since the market price was low.
However, it is the next step which could cause concern. Should the monsoon be poor, combined with the projected 25% drop in sugar production, the central government could step in and ban exports.
���Across the country there will be lower acreage under sugarcane for the forthcoming season, which means lower production. Most of the 40 lakh tonne shortfall is likely to be in Maharashtra,��� an industry source said, on condition of anonymity.
Maharashtra���s sugar production is already at 88.5 lakh tonne for 2007-08, with expectations that it will fall by 25-30% in the next season.
ADVERTISEMENT
The state���s sugar commissioner Rajagopal Devara, while declining to comment on projections for the 2008-09 season on the grounds that it was too early and the monsoon could overturn all projections, said the state would see a fall in new plantation.���The norm for sugarcane cultivation is that 70% acreage consists of new plantation while 30% is from rattoon (left over stalks from previous sowing). For 2008-09, we believe this will be reversed, which will mean that yield will be lower in the rattoon although recovery will be higher. The 30% new plantation will have a higher yield but that depends on the monsoons,��� Mr Devara said.
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
