As is the practice, ISMA procured the State-wise satellite images of cane area in the 2nd week of Jan’ 2022. The satellite pictures have given a good idea of the remaining unharvested area under sugarcane in the fields and therefore also the area that has already been harvested so far across the country.
These images of balance area, trend of yields and sugar recoveries achieved till now, as also expected yield and sugar recovery in the balance period of the sugar season were studied in detail, and discussed in the meeting of ISMA on 31st Jan, 2022, where representatives of sugar mills from all the sugar producing States from across the country were present.
The diversion of sugarcane juice and B-heavy molasses into production of ethanol, as per the ethanol bids made by sugar mills from these feedstocks, and as finalized by the Oil Marketing Companies (OMCs) till end of January 2022, and the consequent diversion of sugar equivalent was also discussed. As per the current quantity of around 310 crore litres, finalized by OMCs from B-heavy molasses and sugarcane juice, around 30 lakh tons of sugar equivalent will get diverted. Considering that many more new distilleries are getting commissioned or getting expanded during this year, some more ethanol is expected to be offered by such sugar mills in the subsequent tenders. ISMA has accordingly estimated that another around 4 lakh tons would be diverted due to more quantities which will be offered subsequently. Accordingly, State-wise 2nd advance estimates of sugar production for 2021-22 SS, are being released after considering such diversion of sugar equivalent into ethanol.
Mills in U.P. are expected to produce about 102 lac tons in 2021-22 SS, as against 110.59 lac tons produced in 2020-21 SS. Estimated lower production this year is because of reportedly lower cane yields and lower sugar recoveries in the State and much higher diversion of sugar for production of ethanol by way of diversion of B heavy molasses and sugarcane juice. Based on the allocations made by the OMCs for supply of ethanol in 2021-22 and further extrapolating expected allocations in the upcoming bids over next few months, it is estimated that about 12.55 lac tons of sugar will be diverted for production of ethanol by the sugar mills in the State of UP in the current year as compared to about 6.90 lac tons diverted in 2020-21 SS.
Maharashtra is expected to produce about 117 lac tons in 2021-22 SS, as against 106.50 lac tons produced in 2020-21 SS. Higher estimated sugar production this year is mainly due to increased cane area by about 11% and better cane yields and sugar recovery as compared to the last season. This is owing to favourable weather conditions as well as increase in percentage of ratoon cane, which helps in better recovery. Based on the allocations made by the OMCs for supply of ethanol in 2021-22 so far and expected to be allocated in the current season, it is estimated that sugar mills in the State will divert about 11.27 lac tons of sugar equivalent for production of ethanol in the current year, which is much higher as compared to about 7.12 lac tons diverted in 2020-21 SS.
The 3rd major sugar producing State viz. Karnataka is expected to produce about 45.21 lac tons of sugar in 2021-22 SS, as against 44.68 lac tons produced in 2020-21 SS. Similar to Maharashtra, there is an increase in cane area and reportedly better cane yields and better sugar recoveries, which is resulting in higher estimated sugar production in the current season. Mills in the State are expected to divert about 7.37 lac tons of sugar equivalent for ethanol production in the current year as compared to about 5.02 lac tons diverted in 2020-21 SS.
These 3 major sugar producing States are estimated to contribute almost 92% of the total estimated diversion of sugar equivalent into ethanol of about 34 lac tons in the current season.
There has not been any major changes in the other sugarcane growing States of the country. As per the second advance estimates, the other States viz. Tamil Nadu, Gujarat, Andhra Pradesh & Telangana, Bihar, Punjab, Haryana, Madhya Pradesh & Chhattisgarh, Odisha and Uttarakhand are collectively expected to produce about 50.60 lac tons, which is more or less similar to what they have produced in 2020-21 SS. These States are collectively estimated to account for about 2.81 lac tons of sugar equivalent diversion into production of ethanol.
Therefore, as per 2nd advance estimates of ISMA, the country is expected to produce 314.50 lac tons of sugar during 2021-22 SS. This is after considering an estimated diversion of sugar equivalent of 34 lac tons for production of ethanol by means of diversion of sugarcane juice /syrup or B-heavy molasses. Similarly, all the above State wise production estimates are given after considering reduction of sugar due to diversion of cane juice and B-heavy molasses for production of ethanol.
As compared to last season, between Oct to Dec 2020 when the sugar mills reportedly sold about 67.54 lakh tons, in this season 2021-22 between Oct to Dec 2021, the sugar mills have already sold 69.06 lakh tons, i.e. around 1.5 lakh tons more than last season. With the demand for sugar picking up well in the current year, it is estimated that the domestic consumption of sugar would be around 270 lakh tons in 2021-22.
As against an export of 4.49 lakh tons of sugar in the previous season between Oct to Dec 2020, the sugar mills have already exported 16.23 lakh tons in the same period of 3 months i.e. between Oct to Dec 2021. With another 8 lakh tons of physical exports in Jan 2022, the total exports is estimated to cross over 24 lakh tons by end of Jan 2022. Export contracts for around 40 lakh tons have already been entered into, and therefore the market is very positive that India will be able to export 60 lakh tons in the current season quite comfortably by the end of Sept 2022.
Considering an opening stock of about 82 lac tons on 1st October 2021, domestic consumption of 270 lac tons, sugar exports of 60 lac tons and the estimated production of 314.5 lac tons, the closing stocks as on 30th September, 2022 is expected to be over 15 lac tons lower at around 66.50 lac tons.
