Mumbai: Record prices offered by millers may prompt farmers to expand sugarcane acreage by a fifth in 2010-11, enhancing output by an estimated 30% on higher yields, industry players said.
Limited availability of cane in major producing areas and record sugar prices saw a stiff battle among millers for cane procurement in 2009-10, lifting prices to fresh highs.
The government had set price at Rs129.84 per 100 kg for 2009-10, but scarcity forced millers to pay as much as Rs260, the highest ever, to farmers. The price has been reset and raised by 7.1% to Rs139.12 for 2010-11 season.
The cane for the 2010-11 crushing season has already been planted and initial estimate has shown a 25% rise in plantation, said Prakash Naiknavare, managing director, Maharashtra State Cooperative Sugar Factories Federation.
“This year area has risen to about 1 million hectares from 800,000 hectares last year.”
Rajendra Chavan, sugar commissioner of Maharashtra, the biggest producer, is expecting more farmers to switch to cane in 2010-11 season.
After Maharashtra, Uttar Pradesh and Karnataka are the other big producers of the sweetner and together produce more than 70% of India’s total output.
Most of the farmers in Maharashtra cultivate cane from June, when monsoon rains hit the country, though those with abundant water reserves cultivate the crop during winter as well.
But in Uttar Pradesh, most of cane planting takes place between Feb to May and rest in Sept-Oct. Uttar Pradesh too is seen raising acreage by 14%.
“Acreage is estimated to increase by 256,000 hectares to 2.04 million hectares in 2010-11 season from 1.78 million hectares last year,” Mahendra Prakash, deputy commissioner at state’s Sugar Commissionerate office said.
Kishore Kumar Sheel, who traditionally takes cane crop in Bijnor in Uttar Pradesh, said he raised area by a hectare to 10 hectares this year.
“Better prospects seems to be in the offing for farmers, as the government has already increased support price,” he said.
The third biggest producer Karnataka is also expecting 20% higher acreage in 2010-11, said an official at the office of the state’s Commissioner for Cane Development.
As on 28 May, acreage under sugarcane in the country stood at 4.285 million hectares, compared to 4.075 million hectares.
In 2009-10 India’s cane output is likely to have risen by a mere 1.3% to 274.66 million tonnes, while output is estimated to have risen 26% to 18.5 million tonnes due to lower diversion of cane for jaggery.
Farmers, officials and analysts all said yields are set to improve across the country this year.
“Yields will improve this year. Farmers (in Maharashtra) are taking better care of the crop and applying fertilizers on time. We are also expecting normal monsoon rains,” Naiknavare said.
India’s weather office has already forecasted a normal June-September monsoon this year, but spread of the monsoon is more important, industry watchers added.
In Uttar Pradesh yields were down last year due to bad monsoon rains, but a normal monsoon will certainly see yields improve there, said Ashwini Bansod, a senior analyst at MF Global Commodities India.
Cane is a perennial crop and is harvested after 12-14 months from plantation. It is also capital and water-intensive and farmers get payments only after 13-15 months from cultivation.
A rise in sugarcane acreage would help India, the world’s biggest producer after Brazil, reduce dependence on imports.
Industry officials say India had contracted for about 6 million tonnes of sugar since the beginning of the season on 1 October, almost double the quantity ordered in the previous season ending September 2009 to bridge a shortfall after output almost halved to 14.7 million tonnes in 2008-09.
The country’s sugar output in 2010-11 is likely to rise to 24-25 million tonnes from 18.5 million tonnes in the current year, Farm minister Sharad Pawar said last month.