India may produce 25 million tonnes of sugar in the next marketing year starting October 1, the main producers' body said on Monday, down by 1 million tonnes from the likely output in the year to September.
India, the world's top producer after Brazil, is expected to produce a total 26 million tonnes in the 12 months from October 1, 2011 - about 4 million tonnes higher than its annual demand.
Around 3 million tonnes of exports have already been approved. "It is slightly early to make a good estimation of sugar production since the rainfall in the next couple of months would be crucial to firm up estimates on the yield, recovery and sugar production," said the Indian Sugar Mills Association (ISMA) in a statement. ISMA's estimate comes one month into the crucial monsoon season, where rains have so far been 29 percent below average during June compared with a 12.2 percent surplus a year ago. Maharashtra, India's largest sugar-producing state, has had very low rainfall in June, which could hit yields.
Planting of cane overall is about 4.6 percent ahead of last year so far, covering 5.22 million hectares for the week ended June 29, according to farm ministry data. "Due consideration was given to lack of adequate rainfall in Maharashtra and Karnataka and its impact on the yield and recovery of sugar in these two states," the statement said.
ISMA's estimates for 2012/13 put output in the northern state of Uttar Pradesh at 7.8 million tonnes, followed by Maharashtra at 7.6 million tonnes and Karnataka at 3 million tonnes. Tamil Nadu could produce 2.5 million tonnes. ISMA said monsoon rains in the next few months in Maharashtra and Karnataka could produce different output figures.
"A better picture on the production estimation will emerge after August by when the fate of this year's monsoon would be known," said Mukesh Kuvadia, secretary of the Bombay Sugar Merchants Association. The monsoon season runs from June to September and the most important months for rainfall are July and August.