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Indian sugarcane acreage estimated 52.28 lakh hectares during 2020-21 season, says ISMA

Indian sugarcane acreage estimated 52.28 lakh hectares during 2020-21 season, says ISMA

Indian sugarcane acreage during 2020-21 sugar season (SS) is estimated at 52.25 lakh hectares, registering 8 percent growth, as compared to 48.41 lakh hectares recorded during the 2019-20 sugar season.

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NEW DELHI, 4 July 2020: Indian sugarcane acreage during 2020-21 sugar season (SS) is estimated at 52.25 lakh hectares, registering 8 percent growth, as compared to 48.41 lakh hectares recorded during the 2019-20 sugar season.

Indian Sugar Mills Association (ISMA) in a statement said, “Based on the satellite images procured in the latter part of June 2020, the total acreage under sugarcane in the country is estimated to be around 52.28 lakh hectares in 2020-21 SS, which is about 8% higher than 2019-20 sugar season’s cane area of around 48.41 lakh ha.”

The increase in acreage and the expected increase in sugarcane production were discussed in the meeting of ISMA on 25 June 2020, wherein representatives from sugar producing States from across the country were present, the statement added.

The images of the cane area, field reports regarding expected yield, sugar recovery, drawal percentage, impact of previous and current year’s rainfall, water availability in reservoirs, expected rainfall during SW monsoon 2020 and other related aspects were discussed in detail during the meeting, the ISMA statement added.

There was an agreement that sugarcane and sugar production during 2020-21 SS would be higher than what is expected to be produced in 2019-20 SS, and that the increase in production will mainly come from Maharashtra and Karnataka, where sugarcane and sugar production had dropped due to drought in previous year.

ISMA is accordingly releasing its State–wise preliminary estimates of sugar production for the 2020-21 SS. This is without considering reduction of sugar because of diversion of B heavy molasses and sugarcane juice/ syrup into production of ethanol.

Uttar Pradesh sugarcane acreage down by 1 percent

Uttar Pradesh, the leading sugarcane producing state in the country is estimated see a marginal decrease by about 1 percent in sugarcane area at 22.92 lakh hectares, as against 23.21 lakh ha area recorded in 2019-20 SS.

ISMA is expecting a marginal increase in yield as well as sugar recovery in 2020-21 SS, owing to good overall standing crop condition and continued replacement of cane variety by high yielding and high sugared cane varieties in more areas.

Thus, sugar production in UP during in 2020-21 SS is estimated to drop to around 123.06 lakh tonnes, as compared to 126.45 lakh tonnes (after diversion into ethanol) in the current 2019-20 SS.

It is noteworthy that current year’s sugar production of the State turned out to be about 5 –6 lakh tons more, mainly because of much better yields as also cane diversion from Gur Khandsari manufacturing units to sugar units, owing to premature closure of their operations due to lockdown, ISAM said referring to drop in sugar production.

Maharashtra’s net cane area has gone up by about 43 percent

Maharashtra’s net cane area has gone up by about 43 percent in 2020-21 SS, which is mainly due to above normal SW and NE monsoon in 2019, followed by normal rainfall from January to March’ 2020, as against the net cane area of 7.76 lakh hectares recorded in 2019-20 SS, area is expected to increase to 11.12 lakh ha in 2020-21. It is noteworthy that during the current 2019-20 SS around 0.5 lakh ha cane area was completely lost due to floods in July- August’ 2019.

June rainfall normal

Commenting on the monsoon, ISMA said that normal pre – monsoon rainfall ‘2020 followed by normal rainfall in June’ 2020 (as on date), accompanied by above normal level of reservoirs is found to be beneficial for early growth of adsali and pre–seasonal crops (18 months and 15 months crop) during their grand growth period. In view of above, overall yield per hectare is expected to go up in the State.

Sugar production is, therefore, estimated to be around 101.34 lakh tonnes in 2020-21 SS, as against 61.61 lakh tonnes produced in 2019-20 SS, i.e. higher by about 39.73 lakh tonnes.

Timely, adequate rainfall leads to increased sugarcane area in Karnataka

Similarly, due to timely and adequate rainfall, sugarcane area in Karnataka has also increased in 2020-21 SS.  Area under sugarcane in 2020-21 SS is expected to be about 4.85 lakh ha as against 4.20 lakh ha. in 2019-20 SS, higher by about 15 percent.  Sugar production in 2020-21 SS is estimated to be around 43.13 lakh tonnes, as against 34.20 lakh tonnes expected to be produced in 2019-20 SS.

Tamil Nadu sugarcane area to remain at same level

Sugarcane area in Tamil Nadu for 2020-21 SS is expected to be more or less at the same level as last year. As against 2.30 lakh ha area in 2019-20 SS, cane area is about 2.2 lakh ha for 2020-21 SS. Sugar production is therefore expected to be around 7.51 lakh tonnes in 2020-21 SS as against 7.80 lakh tonnes expected to be produced in 2019-20 SS.

Sugarcane area in Gujarat to increase by 7 percent

Sugarcane area in Gujarat for 2020-21 SS has increased by about 7 percent to about 2.01 lakh ha. as against 1.87 lakh ha. in 2019-20 SS, mainly due to normal rainfall in major cane growing districts during SW monsoon 2019. Sugar production is expected to be around 10.81 lakh tonnes in 2020-21 SS as against 9.32 lakh tonnes produced in 2019-20 SS.

The remaining States are expected to collectively produce about 34.28 lakh tonnes of sugar in the 2020-21 SS, against 32.86 lakh tonnes produced in 2019-20 SS.

During 2019-20 SS, till 22nd June, 2020, about 270.25 lakh tonnes of sugar has been produced and another about 1.5 lakh tonnes is expected to be produced in the special season till September,2020 in Tamil Nadu and Karnataka, taking total sugar production in 2019-20 SS to about 272 lakh tonnes.

Over 55 crore liters of ethanol made from B heavy molasses, sugarcane juice supplied up to 15 June

In the current season 2019-20, about 55.75 cr. ltrs of ethanol made from B heavy molasses and sugarcane juice have already been supplied to the OMCs as up to 15 June 2020. 

As per standards, this is equivalent to sugar diversion of about 5.5 lakh tonnes in the first 6.5 months. We expect more supplies of ethanol made from B-heavy molasses in the remaining period of the current season. Accordingly, it is estimated that a total of 8 lakh tonnes of sugar would get reduced in the current season, ISMA said.

As per above, and as per total sugarcane expected to be available to the sugar industry for making sugar, ISMA estimates sugar production of 320.13 lakh tonnes of sugar in the season 2020-21. This is assuming normal rainfall and other optimum conditions during the remaining period.

The above estimation of 320.13 lakh tonnes of sugar production is based on total sugarcane expected to be crushed by sugar mills in 2020-21 SS. However, since a significant quantity of sugarcane juice and B-molasses will be diverted into ethanol production, a proportionate quantity of sugar production will get reduced.

With higher availability of sugarcane and surplus sugar production again in next year, it is estimated that a larger quantity of cane juice and B-molasses will get diverted to ethanol, and that a significant diversion will also happen in Maharashtra and Karnataka, in addition to UP.

B-molasses to ethanol to touch 15 lakh tonnes during 2020-21

Accordingly, it is estimated that the diversion of cane juice and B-molasses to ethanol will reduce sugar production by 15 lakh tonnes in next season, as compared to the 8 lakh tonnes diverted this year. However, ISMA will get a better idea of this diversion once the tenders happen and bids are given by millers for ethanol supplies, which will be sometime in September, which will be considered in the 1st Advance estimates that ISMA prepares then.

Therefore, after accounting for the reduction in sugar production due to diversion of cane juice and B-molasses to ethanol, ISMA estimates sugar production in 2020-21 at around 305 lakh tons of sugar.

After considering rainfall in July – September, 2020, water situation in reservoirs, rainfall during monsoon season and second set of satellite images in September 2020 across India, ISMA will review the analysis and if required will release its 1st advance estimates for 2020-21 season in September 2020.  By that time, the crop will be more mature and there will be more clarity on the rainfall and water availability, as also the ethanol supply bids from cane juice and B-molasses.

With an opening balance as on 1 October  2019 of 145 lakh tonnes, estimated sugar production for the current season 2019-20 of around 272 lakh tonnes, expected domestic sales of around 250 lakh tonnes and exports of around 52 lakh tonnes during the season, the opening stocks as on 1 October 2020, is estimated to be around 115 lakh tonnes.

The OB of about 115 lakh tonnes on 1 October 2020, will be 30 lakh tonnes less than the opening stock as on 1st Oct 2019. The OB for 2020-21 of the 115 lakh tonnes is however, about 65 lakh tonnes more than the domestic requirement for the initial months of next season, till when new season’s sugar does not get fully available in the market.  Since we expect much higher production in 2020-21 SS, India will continue to export about 60-70 lakh tonnes of the surplus sugar out of the country during 2020-21 SS. With Thailand’s sugar production to further fall in next season, beyond the 60 lakh tonnes fall in current season, there is an opportunity for India to export sugar to Asian countries.

The ex-mill sugar prices which had fallen to around Rs.31-31.50 per kilo during the lockdown due to drop in domestic sales, have improved quite significantly to close to the levels seen before the lockdown was announced, at around Rs.32-33.50 per kilo now.

Demand picked up again from end of May

Demand for sugar had also fallen during the lockdown from end of March, but as was expected the demand has picked up again from end of May. Thanks to the major relaxations in the lockdown and the summer demand coming up, the sugar offtake seems to have reached normal levels.

Oil marketing companies procures 88 crore litres of ethanol up to 15 June

Similarly, thanks to the pro-active steps taken by the oil marketing companies (OMCs) and cooperation extended by ethanol suppliers during the last 2-3 months, the ethanol offtake, which could have been majorly impacted due to drop in sales of petrol and lack of storage capacities in some depots of OMCs, has been almost normal.

The OMCs took prompt action to relocate the supplies to alternate depots in other States, to ensure smooth ethanol offtake from the distilleries. As a result, against an annual supply contract of 170 crore litres for 2019-20 (Dec-Nov), 88 crore litres have already been supplied till 15 June 2020, i.e. almost 52 percent of contracted quantity has been supplied in the 6.5 months of the contract period. Ethanol blending in petrol for the country as a whole has therefore at 4.97 percent as up to 15 June 2020.

This is despite the lower production of sugarcane and molasses due to drought in Maharashtra and Karnataka. The 3rd tender was floated for more ethanol on 1 June 2020, at the same prices decided by Government in July 2019, and the bids are expected to be opened soon, which will increase supplies.

Image credit: Getty Images


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