ISMA cuts sugar output forecast for 3rd time in 2016-17

Indian Sugar Mills Association (ISMA) has trimmed the country's 2016-17 sugar production forecast for the third time this marketing year today, citing lower cane supply in drought-hit states like Maharashtra.

Mills have manufactured 16.24 million tonnes in the first five months of the 2016-17 marketing year (October-September).

ISMA's revised outlook predicts total sugar output to be around 20.3 million tonnes for the entire year.

This is down from a previous projection of 21.3 million tonnes made two months ago, and down from a September 2016 forecast of 23.4 million tonnes.

In 2015-16, the mills had produced 25.1 million tonnes.

The industry body explained that it revised the sugar production outlook taking into account the sharp fall in sugarcane yields in Maharashtra, Karnataka, Andhra Pradesh and Telangana because of drought.

"Yield of the sugarcane harvested in January and February in Maharashtra, Karnataka, Andhra Pradesh and Telangana, which were badly affected by drought that the states faced in the last couple of years, turned out to be substantially lower to what was being expected," it said in a statement.

The yields in some areas were 40-50 percent lower than the year-ago. That apart, higher need of seed for increased acreage, especially in Maharashtra, also resulted in lower sugarcane availability for crushing this year.

According to ISMA, the output in Maharashtra -- the country's top sugar producing state -- is now pegged at 4.2 million tonnes for 2016-17, down from over 7 million tonnes last year.

The state has produced 4.11 million tonnes so far this year and most mills have closed their crushing operations now.

Similarly, sugar production in Karnataka is expected to be 2.12 million tonnes. Already, the production has reached 2.05 million tonnes so far this year and some more could be produced during the special crushing period from July.

However, cane supply and sugar recovery in Uttar Pradesh, the country's second biggest sugar producing state, is better than last year. Production is expected to be 8.5 million tonnes this year as against 6.8 million tonnes last year.

Crushing operation is still on in the state and mills are expected to run till the latter part of April 2017.

ISMA said the country will have enough sugar to meet the domestic demand of about 23-24 million tonnes after the revised production outlook.