Sugar output in India's Maharashtra set to fall to lowest in 4 yrs after dry August

E I D-Parry (India)

13/09/2023 07:15

By Rajendra Jadhav
       MUMBAI, Sept 13 (Reuters) - Sugar output in Maharashtra,
India's top producing state, is likely to fall 14% in the
2023/24 crop year to its lowest in four years due to lower cane
yields following the driest August in more than a century,
industry and government officials told Reuters on Wednesday.
    The reduced output could add to food inflation and
discourage New Delhi from allowing sugar exports, supporting
global prices  SBc1   LSUc1  which are already near their
highest in more than a decade.
    Higher domestic prices will, however, improve margins for
producers such as Balrampur Chini  BACH.NS , Dwarikesh Sugar
 DWAR.NS , Shree Renuka Sugars  SRES.NS  and Dalmia Bharat Sugar
 DLMI.NS , helping them make payments on time to farmers.
    The western state of Maharashtra, which accounts for more
than a third of India's sugar output, could produce 9 million
metric tons in the 2023/24 season (which begins on  Oct. 1),
down from 10.5 million tons in 2022/23, said B.B. Thombare,
president of the West Indian Sugar Mills Association.
    "The sugar cane crop didn't receive ample rainfall during
the crucial growth phase this year. In almost all districts, the
crop's growth is stunted," he said.
    Maharashtra, which often surprises the global sugar market
with wide swings in production, received 59% lower rainfall than
normal during August.
    
    Maharashtra's sugar commissioner Chandrakant Pulkundwar said
he had been informed by representatives from sugar mills during
a review meeting that cane yields would be lower this year due
to a prolonged dry spell and higher temperatures.
    The crop badly needs good rainfall in September to limit
damage caused by the dry spell, Pulkundwar said.
    India is likely to receive an average amount of rainfall in
September, the state-run weather department has forecast, after
the driest August in more than a century.
    Maharashtra's output is crucial to India's ability to
export, making the outlook for overseas shipments dismal for 
the coming season, a Mumbai-based dealer with a global trading
house said, declining to be named due to his company's policy.
    In 2021/22 Maharashtra produced a record 13.7 million tons,
allowing New Delhi to export a record 11.2 million tons.
    As Maharashtra's output fell to 10.5 million tons in
2022/23, India curtailed exports to 6.1 million tons.
    New Delhi is expected to ban mills from exporting sugar in
the season beginning October, halting shipments for the first
time in seven years, three government sources told Reuters last
month.

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Dip in output    https://tmsnrt.rs/3RjXJkH
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Rajendra Jadhav; Editing by Simon Cameron-Moore)
 ((rajendra.jadhav@thomsonreuters.com; +91-22-68414378 ; Reuters
Messaging: rajendra.jadhav.thomsonreuters.com@reuters.net))