Maharashtra stares at 27-40% shortfall in sugar yield in 2016-17

If estimates hold true, UP will for the first time since 2005-06 topple Maharashtra as the top sugar producer


Maharashtra alone accounts for 34% of the national sugar output. Photo: Bloomberg
Maharashtra alone accounts for 34% of the national sugar output. Photo: Bloomberg

Mumbai: Maharashtra, India’s top state in terms of sugar cane productivity and sugar output, may register a whopping 27-40% shortfall in sugar yield in the 2016-17 season, according to estimates separately put out by the Indian Sugar Mills Association (ISMA) and Maharashtra State Co-Operative Sugar Factories Federation Ltd (Maha Sugar Fed).

Though Uttar Pradesh, which has the largest area under sugar cane cultivation, is likely to produce slightly higher stock of sugar this season according to these estimates, the aggregate national yield may decline by nearly 8% mainly on account of much reduced yields in Maharashtra and Karnataka. Maharashtra and Karnataka contribute 45-50% to India’s sugar production. Maharashtra alone accounts for 34% of the national sugar output. If these estimates hold true for the season, Uttar Pradesh will for the first time since 2005-06 topple Maharashtra from the position of top sugar producer, according to ISMA and Maha Sugar Fed managing director Sanjeev Babar.

In its preliminary estimates for the 2016-17 season, ISMA, the apex sugar industry body, has said that little less than 5 million hectares have come under sugar cane cultivation in the country. This is 5.5% less than the area under sugar cane in 2015-16—approximately 5.3 million. ISMA expects a national output of 23.26 million tonnes (mt) of sugar this season, down from 25.1 mt in 2015-16. In Maharashtra, sugar cane was grown on around 1 million hectare in 2015-16. In the current season, acreage under sugar cane has shrunk to 780,000 hectares and ISMA estimates that Maharashtra’s sugar yield in 2016-17 will be around 6.1 mt as against 8.4 million tonnes in 2015-16. Uttar Pradesh, according to ISMA satellite surveys, has grown sugar cane on 2.3 million hectares which represents a marginal increase over the 2015-16 acreage. The northern state, on the basis of a better rainfall this season and cultivation of a productive variety called CO 0238, is estimated to produce 7.5 mt of sugar in 2016-17, up from 6.8 mt in 2015-16. Sugar output in Karnataka is likely to fall to 3.2 mt from 4 million tonnes in 2015-16.

ISMA, however, has pointed out that an estimated opening national stock of 7.1 mt on 1 October 2016, plus the estimated production of 23.26 mt this season will take the aggregate stock to 30.36 mt. “This is much higher than the domestic sugar consumption of about 26 million tonnes,” the ISMA report said.

What is worse for Maharashtra’s sugar industry is the even gloomier early estimate made by members of the Maha Sugar Fed, Maharashtra’s top industry body with membership of nearly 200 co-operative sugar factories, and officials at the Pune-based Sugar Commissionerate. Harshwardhan Patil, senior Congress party leader and member of the Maha Sugar Fed, said the Federation reckons that yield in Maharashtra in 2016-17 may fall to 5 mt, which will represent a record 40% drop in the state’s sugar output. “This would be the steepest ever year-on-year fall in sugar output in Maharashtra. The shortfall of 3.4 million tonnes compared to 8.4 million tonnes in 2015-16 may lead to the retail prices of sugar shooting up around Diwali,” Patil said.

Sugar Fed’s Babar said there was only 1-2% chance of any change in the estimate of 5 mt. “Sugarcane is a 10-12 month crop but the acreage under cultivation does not show significant changes after July. Unless the acreage itself increases significantly, there may not be any upward revision of this estimate,” Babar said.

An official at the state’s Pune-based Sugar Commissionerate, who did not want to be named, said the state government had not yet “allowed” the Commissionerate to put out sowing data for the 2016-17 season to “prevent panic in the industry”. “ISMA figures are much more optimistic than what our ground surveys tell us. We think the acreage is even less than 7.8 lakh hectares as ISMA projects and production could fall even below 5 million tonnes. The reason for this decline is that the sugar cane growing parts of the state are still reeling under the effects of drought and rainfall so far has not been enough for big dams and catchment areas,” the Commissionerate official said.

B.B. Thombare, chairman and managing director of private sugar mill Natural Sugar and Allied Industries Ltd based in Marathwada’s Osmanabad district, agrees with ISMA and Maha Sug Fed’s estimates. “The industry is looking at a very serious shortfall this season due to reduction in acreage consequent to the drought. Marathwada, Khandesh, Solapur, and Ahmednagar regions produce 60% of Maharashtra’s sugar and these regions have witnessed a 75% reduction in the acreage under cultivation. In districts of Sangli and Kolhapur, there is a 10-15% reduction in acreage. I do not see our state output going beyond 5 to 5.5 million tonnes this season,” Thombare said. He is also the president of ISMA-affiliated West India Sugar Mills Association.

Apart from drought, industry stakeholders say the “sustained campaign” by the “anti-sugarcane lobby” in and outside Maharashtra has also driven farmers away from the high-yielding commercial crop. “A scare has been created in the last three four years that the sugar industry is responsible for drought without substantial evidence to support this claim. As a result, the acreage under sugarcane has been shrinking. This anti-sugarcane lobby forgets that sugarcane is not just a standalone crop but it sustains a whole industry,” Harshawardhan Patil said, adding Maharashtra chief minister Devendra Fadnavis had also contributed to the creation of this “scare” by his “anti-sugarcane” statements and inconsistent sugar policy.

Pradeep Purandare, water expert and former associate professor at the Aurangabad-based Water and Land Management Institute, has been one of the strong voices against the “water guzzling” sugar industry. He welcomed the decrease in sugarcane cultivation saying it was “a good sign that farmers were choosing other crops”. But he added that the ISMA and Maha Sugar Fed estimates may not be reliable as they are the industry stakeholders. “Also, these figures do change in the later part of the season,” Purandare said.

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