MUMBAI, Aug 25 (Commoditiescontrol):Drier conditions in some of India's major sugar-producing regions, including Maharashtra, are jeopardizing the upcoming sugar harvest, and potentially putting further strain on rising global food costs. Maharashtra, which accounts for a significant 37% of India's sugar output, is critically in need of rain to recharge the groundwater used for irrigation.
Recent reports suggest that the sugar crop is currently at risk due to below-average monsoon showers. However, the situation could still improve if there's adequate rainfall during the remaining monsoon months. Some parts of Maharashtra have registered a concerning 20% deficit in rainfall since the start of the season, as per the weather bureau's data.
This looming threat of a reduced sugar harvest could necessitate government interventions, similar to previous measures taken to stabilize domestic rice prices. Such initiatives might become crucial, especially with national elections looming early next year.
The country's decision regarding overseas sugar exports for 2023-24 is pending and will be determined when actual production figures are available, says the food ministry. The stakes are high; India stands as the world's second-largest sugar producer after Brazil. Any decision India takes concerning production shortfalls or potential export bans could send ripples across the global market, influencing sugar futures traded in cities like New York and London. Following reductions in yields due to late monsoons the previous year, India permitted exports of 6.1 million tons in 2022-23, a significant decrease from 11 million tons the year prior.
However, despite the fact that a vast majority (94%) of India's sugar cane fields are irrigated, the monsoon rains from June to September are essential. They play a pivotal role in replenishing reservoirs, groundwater, and other water sources crucial for agriculture. Rainfall patterns have been erratic with regions like Karnataka registering a deficit of up to 27%, while Uttar Pradesh has seen mixed results.
The major sugar-producing states – Uttar Pradesh, Maharashtra, and Karnataka – contribute to over 80% of India's total sugar cane yield. Current statistics show a concerning 21% decrease in water storage across India's 146 primary reservoirs compared to last year, as reported by the Central Water Commission.
As per trade estimate 15- 20% dip in the harvest due to decreased rainfall is possible. Given the circumstances mills may delay their operations, allowing crops more maturation time. The usual commencement of crop crushing in mid-October might thus see a delay this season.
(By Commoditiescontrol Bureau; +91-9820130172)
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