Lucknow: Projected less cane cultivation and increase in the ethanol production is expected to give a sweet time to domestic sugar sector for next season (2019-20). The hike in market prices of sugar this month has also created a positive impact in the industry. Centre has raised sugar sales quota to 2.1 million tonnes (MT) for May, and a similar quota is expected for June 2019.
The water level in the reservoirs in Maharashtra has depleted due to less rainfall in the last monsoon season. This indicates that cane acreage in the state will be lower in the coming season. The situation is the same in other states leading to less cane production in the country next year which will ultimately reduce the sugar production.
Along with this, the mills are developing the capacity to produce ethanol and the sector would divert excess quantity of ‘B’ heavy molasses to produce ethanol to maintain balance. This will reduce sugar production and save the industry from sugar glut.
ISMA will announce its estimates for season 2019-20 after obtaining satellite images of cane cultivation area in the country next month. For the current season, ISMA has increased the target by 0.5 MT to 33 million tons.
According to rating agency ICRA, the domestic cane arrears will be reduced due to a hike in demand for sugar in summer for beverages, soft drinks and ice cream.