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Sugar Output in India Seen Sinking to 3-Year Low on Dry Weather

Pratik Parija
Sugar Output in India Seen Sinking to 3-Year Low on Dry Weather

(Bloomberg) -- Sugar output in India may drop to a three-year low next season from a record as dry weather shrivels cane plants in some major growing areas of the country.

Production in India, which vies with Brazil as the world’s top grower, may slide to 28 million to 29 million tons in the year that begins Oct. 1 from 33 million tons this year, said Prakash Naiknavare, managing director of the National Federation of Cooperative Sugar Factories Ltd.

Droughts are withering cane fields in parts of Maharashtra and Karnataka, and the monsoon is delayed, reducing prospects for the coming crop. A lower harvest would trim a record domestic surplus, potentially curtailing exports and supporting global prices. India swings between being a sugar importer and exporter, depending on the size of local output.

“Parts of Maharashtra and Karnataka are reeling under drought, which is adversely affecting cane productivity and sugar recovery,” Naiknavare said in a phone interview on Wednesday. “Production will also depend on this year’s monsoon rains.”

Sharp Drop

Sugar production in Maharashtra, the country’s second-biggest grower, may slump about 40% to 6.44 million tons in 2019-20 from this year, said Shekhar Gaikwad, Maharashtra’s sugar commissioner. The area under cane, which will be available for crushing next season, will likely drop about 28% to 843,000 hectares (2.08 million acres) from a year earlier, he said.

Sugar cane plants in a large part of Maharashtra have dried up, Gaikwad said. Many farmers are selling their cane to fodder buyers as they are currently fetching better prices than a sugar mill offers, he added. Farmers need to keep irrigating the crop for the next 6 to 8 months, but they are not certain about the monsoon’s performance this year, Gaikwad said.

The southwest monsoon, which waters more than half of India’s farmland, arrived on the southern coast more than a week later than normal, according to the weather office. The monsoon, which typically reaches Karnataka by June 5 and Maharashtra by June 10, is also delayed in the two states.

“The standing crops, such as sugar cane, need immediate watering and farmers need to arrange for irrigation because of the delay in monsoon rains,” said K.K. Singh, head of Agromet division of the India Meteorological Department.

To contact the reporter on this story: Pratik Parija in New Delhi at pparija@bloomberg.net

To contact the editors responsible for this story: Anna Kitanaka at akitanaka@bloomberg.net, Atul Prakash, James Poole

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