Chennai, Aug. 10 Low prices for sugar during the last two years and delay in payment for sugarcane delivered by growers to sugar mills seem to have taken a toll on the commodity’s production for the ensuing season starting October.
Preliminary estimates made by the Union Government, after consulting the Cane Commissioners of various States last week, have put the 2008-09 sugar production at 220 lakh tonnes (lt). This is 17 per cent lower than the 265 lt sugar estimated to have been produced this year.
But taking into account the production during 2006-07, when it was estimated at 285 lt, a 23-per cent fall has occurred in the last two seasons.
The estimate made by the Centre comes with a rider:the production could improve by 5 to 7 per cent, resulting in additional 10 to 15 lt.
“The monsoon has revived and its coverage has been good in the key growing States. However, we don’t see the production exceeding 230 lt,” said Mumbai-based sugar trading sources.
“The sugarcane that will come for crushing in September was planted last year. During 2006-07 and most part of this season, sugar prices prevailed lower than the rates at which the Government supplies sugar through ration shops. This discouraged farmers and we witness the phenomenon continuing this year, too,” said the sources.
According to industry outlook, production in Maharashtra is expected to decline 38 per cent to 57 lt against 92 lt, while in Uttar Pradesh it is likely to fall 14 per cent to 65 lt (76 lt). Karnataka with 25 lt (28 lt), Tamil Nadu with 20 lt (25 lt) and Andhra Pradesh with 10 lt (13 lt) are the other States where the output is estimated to decline.
“Due to lower prices for sugar and delay in getting their payment, farmers have switched over to other crops,” the sources said.
Soyabean and maize (corn) are the crops that have gained from the switchover. Though statistics show that last year, area under sugar was up at 51.04 lakh hectares against 48.3 lakh hectares the previous year, the loss seen next season is in view of some farmers selling sugarcane as fodder.
During the current kharif season, the area under sugarcane is showing a decline at 44 lakh hectares from 53 lakh hectares a year ago.
Industry and trading sources said the current estimates are based on a normal recovery of 10 per cent.
“Any talk of yield or recovery can crop up only in September when a clear picture of the weather’s effect on the crop will be known,” the sources said.
However, a carryover stock of 110 lakh tonnes, as estimated by the Government from this season, is expected to ensure ample supplies next season....Business Line
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