Sugar production likely to decline by 3 per cent in Uttar Pradesh in SY21: ICRA


New Delhi, July 25 (ANI): According to investment information firm ICRA, in Uttar Pradesh, the sugar production is likely to decline by 3 per cent to 12.3 million tonnes in SY21. In SY20, the production was higher by around 0.5 million to 0.6 million tonnes than anticipated, because sugarcane which was generally used by the local gur and khandsari manufacturers got diverted to sugar mills with operations prematurely shut due to the lockdown.

In Maharashtra, sugar production is expected to increase by 64 per cent at 10.1 million tonnes and in Karnataka by 26 per cent to around 4.3 million tonnes in SY21.

Speaking about India then the domestic sugar production is likely to increase by 12.1 per cent to 30.5 million tonnes in SY21 after adjusting for the impact of diversion of B-heavy molasses and sugarcane juice for ethanol manufacture.

“This increase in production is majorly driven by the increase in cane availability in Maharashtra and Karnataka in SY21,” said Sabyasachi Majumdar, Senior Vice President and Group Head at ICRA Ratings.

The closing stocks for SY20 at 11 million to 11.5 million tonnes after considering the consumption of 25 million tonnes (decline of 3.8 per cent year-on-year) and exports of 5 million to 5.5 million tonnes. This along with higher sugar production for SY21 is likely to result in domestic sugar availability of around 42 million tonnes.

In light of continuing sugar surplus scenario in the domestic market, continued government support will be critical for industry’s profitability.

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  1. Uttar Pradesh being the largest sugarcane growing state in the country, it’s contribution in the total sugar production of India is around 40 per cent. U.P. occupies this pride of place mainly due to larger acreage of cane area in western and central UP.
    During the last sugar season, post monsoon rainfall played spoilsport with ready to harvest sugarcane crop. The crop suffered heavy loss due to late monsoon in low lying areas due to lodging. Above all, in eastern UP outbreak of Red rot disease in CO 0238 variety of cane, the most promising variety of cane in UP, which has largest acreage in the state and transformed the economy of sugar industry in the state, resulted in a loss of production and ratoon area.
    As usual with cane crop, cane farmers expected decaration of higher sugarcane price last year, but instead of this, they suffered erosion of income from other sources like sale of sugarcane to juice during summer owing to COVID19 related lockdown.
    As a result of above, cane acreage in spring season and post wheat season deceased over corresponding period last year.
    Sugarcane farmers are again uncertain, since there is no variety that can compete with the productivity of CO 0238 variety of cane. So, there are fair chances that total sugar production in UP might slip in sugar year 2021.


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