Sugar Output in India Seen Slipping From Record on Dry Weather

(Bloomberg) -- Sugar output in India may drop to a three-year low next season from a record as dry weather parches fields in some major growing areas.

Production in the country, which vies with Brazil as the world's top grower, may slide to 28.2 million metric tons in the year that begins on Oct. 1 from an estimated 32.95 million tons this year, the Indian Sugar Mills Association said in a statement on Monday, citing its preliminary crop estimates.

While prolonged droughts shriveled cane plants in parts of Maharashtra and Karnataka, a delayed monsoon has further reduced crop prospects. A lower harvest would trim a record domestic surplus, potentially curtailing exports and supporting global prices. India swings between being a sugar importer and exporter, depending on the size of local output.

The monsoon, which waters more than half of India's farmland, arrived on the southern coast more than a week later than normal, according to the India Meteorological Department. Rainfall across the country was 33% less than normal in June, it said. Rain in Uttar Pradesh, the country's top sugar producer, was 61% lower than the long-term average, while Maharashtra, the No. 2 grower, received 25% less than normal.

Other highlights from the statement:

• India will still need to export sugar in 2019-20 due to ample domestic surplus
• Opening sugar stockpiles seen at an all-time high of 14.5 million tons on Oct. 1, compared with a normal requirement of 5 million tons at that time
• Sugar cane area in the country estimated at 4.93 million hectares in 2019-20, a drop of 10.4% from a year earlier: ISMA
• Sugar production in top producer Uttar Pradesh seen rising to 12 million tons from 11.82 million tons year earlier on better yields; cane acreage in the northern state estimated at 2.36 million hectares, compared with 2.41 million hectares in 2018-19
• Sugar output in Maharashtra is likely to plunge 34.7% to 7 million tons next year; cane area is expected to slump by almost 30% to 823,000 hectares due to poor rain and low reservoir levels
• Acreage in Karnataka estimated at 420,000 hectares vs 502,000 hectares in 2018-19; sugar production seen at 3.5 million tons vs 4.37 million tons
• Acreage in Tamil Nadu estimated at 230,000 hectares vs 260,000 hectares in 2018-19; sugar production seen at 750,000 tons vs 860,000 tons
• ISMA will release its next estimate for sugar and cane production after assessing rain between July and September and water levels in reservoirs

To contact the reporter on this story: Pratik Parija in New Delhi at pparija@bloomberg.net

To contact the editors responsible for this story: Anna Kitanaka at akitanaka@bloomberg.net, Atul Prakash, James Poole

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