India's Sugar Production May Increase 17% Next Year, Farm Minister Says
India Sugar Production to Match Demand
Prashanth Vishwanathan/Bloomberg
A shopkeeper measures sugar at a wholesale market in New Delhi.
A shopkeeper measures sugar at a wholesale market in New Delhi. Photographer: Prashanth Vishwanathan/Bloomberg
Sugar production in India, the biggest consumer, may jump 17 percent as rains improve yields, helping the nation meet domestic demand, Farm Minister Sharad Pawar said.
Production may rise to 22 million metric tons, Pawar said in an interview in New York yesterday. India’s monsoon rainfall, the main source of irrigation for the nation’s 235 million farmers, was 1 percent below normal from June 1 to Aug. 30, the Indian Meteorological Department said.
India has been a net buyer since 2008 after a drought ravaged crops, pushing prices in New York to a 29-year high of 30.4 cents in February. Increased production from the Asian country may weigh on prices that have slumped 24 percent this year on bets that rising supplies may erase a global deficit.
“Our observation is that the quantity of rainfall in sugarcane areas has been extremely good,” Pawar said. “I don’t think we will be in a situation where we will need to import this year.” The country’s production “may exceed” annual demand of about 23 million tons, he said in May.
India may produce 25.5 million tons of the sweetener in the year beginning Oct. 1, from 18.8 million tons estimated this year, according to the Indian Sugar Mills Association. The nation may have as much as 2.5 million metric tons of surplus for exports, Jayantilal Patel, president of the National Cooperative Sugar Factories Ltd., said on Sept. 1.
Farmers planted cane on 4.77 million hectares (11.8 million acres) as of Aug. 26, up 14 percent from a year ago, according to the farm ministry. Above-average rain in the growing areas in central and southern regions will result in “strong yields,” Australia & New Zealand Banking Group Ltd. said in an e-mailed report on Sept. 2. It forecast output at 25 million tons.
Crop Damage
The sugar market may have a smaller surplus than earlier forecast because of crop damage in nations including Russia and Pakistan, and dry weather in Brazil, the top producer, broker Kingsman SA, said on Sept. 1.
Next year, production will rise 9 percent to a record 172.5 million tons, creating a 2.5 million-ton surplus, according to the International Sugar Organization’s estimates.
India may decide on a plan to end controls on sugar producers after assessing the size of next season’s crop, Pawar said.
India’s government decides the floor price for cane, the quantity of sugar to be sold in the market every month and buys 20 percent of output at below-market prices from mills to sell to the poor. Pawar in July said the time is right for the government to end controls on sugar mills as output it set to rebound. “We have not reached any decision as yet,” he said.
The farm minister on Sept. 2 briefed Prime Minister Manmohan Singh about the plan to end controls on sugar producers, the Press Trust of India reported that day, citing people it didn’t identify. Pawar made a presentation about the way the ministry may lift controls and how withdrawing restrictions would benefit consumers and farmers, the agency said.
To contact the reporter on this story: Debarati Roy in New York at droy5@bloomberg.net
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