India's sugar output may drop next year as drought cuts cane planting

Triveni Engineering and Industries

12/12/2018 10:22

* Scant rainfall trims cane area in Maharashtra, Karnataka
    * White grub infestation forces some farmers to uproot cane
    * India's 2019/20 sugar output seen falling - trade body
    * Maharashtra's 2019/20 sugar output seen at 7.5 mln T-
trade body

    By Rajendra Jadhav
    MUMBAI, Dec 12 (Reuters) - India's sugar production could
fall in 2019/20 as farmers are struggling to plant cane because
of a drought in two of the country's top producing states,
according to multiple industry officials and traders. 
    A drop in production would slash exports from the world's
second-biggest sugar producer and support global prices that
have fallen  SBc1   LSUc1  15 percent so far in 2018.
    "Many farmers couldn't plant cane in Maharashtra and
Karnataka due to water scarcity. This will reflect in next
year's production," said Prakash Naiknavare, managing director
of The National Federation of Cooperative Sugar Factories Ltd, a
sugar processor trade group.
    Cane is a perennial crop harvested 10 to 16 months after
planting. The western state of Maharashtra is the country's
second-biggest sugar producer, while southern state of Karnataka
ranks third.
    India's production during the 2019/20 marketing year could
fall to between 28 million tonnes and 29 million tonnes from
this year's estimated 31.5 million tonnes to 32 million tonnes,
Naiknavare said. 
    Maharashtra's production could fall 16.7 percent to 7.5
million tonnes in the next season, he said.
    The sugar marketing year runs from October to September.
    "We don't have enough water for cane planted last year.
Planting on new areas is not possible," says Shrikant Ingale,
who was planning to plant cane on 7 acres (2.8 hectares) in the
village of Mhada, about 350 km (210 miles) southeast of Mumbai.
    Maharashtra received 23 percent less rainfall than normal
this year during the June to September monsoon season, while the
rainfall deficit in Karnataka's cane growing region was 29
percent during the period.
    Production may fall by half in Maharashtra's central part of
Marathwada, where people are struggling to secure drinking
water, said B. B. Thombare, managing director of Natural Sugar &
Allied Industries, a sugar mill based in the region.
    Apart from water scarcity, an infestation of white grubs
will curtail production next season.  urn:newsml:reuters.com:*:nL3N1WW2V2
    Farmers usually keep a ratoon crop, but this year many are
uprooting those plants because of the white grub infestation and
water scarcity, said Sanjay Khatal, managing director of
the Maharashtra Co-operative Sugar Factories Federation.
    The ratoon crop is the root stub of the cane after the first
harvest that remains in the ground for a second harvest, but
that must be removed to kill off the grubs.
    After record production in the 2017/18 year, Indian mills
were struggling to export the surplus and sought the government
help for overseas sale and to support local prices.  urn:newsml:reuters.com:*:nL4N1WC3I7
    A decline in sugar output could lift local prices and prompt
the government to halt export incentives, said a Mumbai-based
dealer with a global trading firm.
    "Indians shipments would be limited next season. Mills will
find it more lucrative to sell in the local market than
overseas," the dealer said.

 (Reporting by Rajendra Jadhav; Editing by Christian
Schmollinger)
 ((rajendra.jadhav@thomsonreuters.com; +91-22-6180-7153 ;
Reuters Messaging:
rajendra.jadhav.thomsonreuters.com@reuters.net))