ISMA pegs India's sugar output up 13% at 31 million tonnes for 2020-21 season

India's sugar production is estimated to increase by 13 per cent to 31 million tonnes in the 2020-21 marketing season starting this month, on likely higher availability of sugarcane, according to industry body ISMA.

The output has been estimated after taking into account a likely diversion of about 2 million tonne of cane juice and B molasses for ethanol production, it said.

In the 2019-20 season (October-September), sugar production remained lower at 27.42 million tonnes and diversion to ethanol was about 0.8 million tonnes.

Since higher production is pegged for the 2020-21 season, ISMA said that India will need to continue to export about 6 million tonne of surplus sugar this season.

Releasing initial estimates, the Indian Sugar Mills Association (ISMA) said: "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 31 million tonnes of sugar."

With higher availability of sugarcane and surplus sugar production, it is estimated that a larger quantity of cane juice / syrup and B-molasses will get diverted to ethanol.

However, ISMA will get a better idea of this diversion once the tenders are called and bids are given by millers for ethanol supplies, it said in a statement.

According to the first advance estimate, sugar production in Uttar Pradesh -- the country's largest sugar producing state -- is projected to be slightly lower at 12.45 million tonnes in the current 2020-21 season, as against 12.63 million tonnes last season.

But the output in Maharashtra -- the country's second-largest sugar producer -- is estimated to increase sharply to 10.80 million tonnes from 6.16 million tonnes in the said period on account of higher cane supplies in view of a 48 per cent increase in sugarcane area this year.

Similarly, output in Karnataka -- the country's third largest sugar producing state -- is estimated to increase to 4.60 million tonnes this season from 3.49 million tonnes in last season on hopes of higher cane production due to a 19 per cent increase in sugarcane area, thanks to the normal southwest monsoon.

Sugar production in Tamil Nadu is projected to be 7,51,000 tonne in 2020-21 season, more or less similar to that of the 2019-20 season, while in Gujarat it is expected to increase to 10,81,000 tonne from 9,32,000 tonne in the said period.

The other states are expected to collectively produce about 33,28,000 tonne sugar in the 2020-21 season, almost at the same level as in the previous season, ISMA said.

As on October 1, the industry body said opening stock of sugar is estimated to be 10.64 million tonne which is lower than last season but much higher than the domestic requirement for the initial months of next season till when the new season's sugar does not get fully available in the market.

It also mentioned that since crushing is expected to start soon, a better picture would emerge after a few months when the actual trend of yields and sugar recoveries would become available.

ISMA will again review the sugarcane and sugar production estimates in January 2021.