State, ISMA not on same page about sugar estimate

10.10.2016

Sugar prices in India depend to a large extent on supply from the leading producer, Maharashtra, but the state government and the Indian Sugar Mills Association (ISMA) differ considerably in their estimates of this year’s output, making forecasting prices hazardous.

ISMA has pegged drought-ridden Maharashtra’s 2016-17 sugar production at 62.7 lakh tonnes while the state’s sugar commissionerate expects output of just 50.28 lakh tonnes.

In 2015-16, Maharashtra had produced 83.4 lakh tonnes of sugar and India’s total output was 251 lakh tonnes.

According to ISMA’s first advance estimate for 2016-17, India’s sugar output is expected to decline 7% to 233.7 lakh tonnes this year.

However, the fall will be nearly 12% to 221.3 lakh tonnes if the state government's estimate is taken into consideration.

The main difference between the estimates of the two bodies is between the area projections. ISMA has taken cane area at 8.10 lakh hectares while the state government’s estimate is 6.33 lakh hectares.

Brushing aside indications that the satellite may not be able to differentiate between maize and sugarcane, ISMA officials said that over the past six years the association has developed the expertise to differentiate between these signals.

“We make estimate of cane production based on satellite images, of which, this is the sixth year. We do scientific calculation of cane area. Beyond that, it has to be done manually,” said ISMA director general Abinash Verma.

ISMA’s first advance estimate for 2015-16 was 270 lakh tonnes, though, while the actual production was only 251 lakh tonnes.

The central government had then extended subsidy linked to exports to the sugar mills to help them make cane payments as the industry was plagued by subdued sugar prices due to “excess” production.

But as domestic prices started increasing, the Centre government stopped the export incentives scheme mid-way and turned its focus to price control measures such as imposition of stock limit, first on traders and then on millers, and imposition of 20% duty on sugar export.

“Our figures are based on the information from the agriculture department. Last year, there was difference of only 1% in our estimate and the actual figures,” said Vipin Sharma, commissioner (sugar), Maharashtra.  ..

This time, however, representatives of private as well as cooperative sugar mills from Maharashtra said, the estimate of the sugar commissioner’s office could be on the lower side. “We think that the sugar production can be 55 lakh tonnes to 58 lakh tonnes,” said BB Thombre, president of Western Indian Sugar Mills Association.

Maharashtra’s sugar millers said that productivity of cane can be higher than the government’s estimate of 78 tonnes per hectare due to good rainfall and delayed beginning of crushing operations.


indiatimes

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