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20 Oct 2020 | 05:40 UTC — Singapore
By Brian Ng and Ratnajyoti Dutta
Highlights
Cane acreage rises 9% to 5.27 million hectares
Indian 2020-21 exports forecast at 6 million mt
Higher Indian output set to compete with Thai sugar
India's sugar production is forecast to rise 13% year on year to 31 million mt in the Oct. 1 2020-Sept. 30, 2021 marketing year, the Indian Sugar Mills Association said in its latest update Oct. 19, due mainly to increased cane acreage in key producing western and southern regions.
Total cane acreage in India is 9% higher on the year at 5.27 million hectares, despite a marginal decline in the cane area in the leading producing northern state of Uttar Pradesh, ISMA said.
India's opening stock for the new marketing season was estimated at 10.64 million mt Oct. 1, down 27% on the year, ISMA said. Analysts attributed the lower opening stocks to lower sugar production coupled with stronger export sales in the 2019-20 marketing year.
However, the opening stocks for 2020-21 were still 5.5 million mt higher than domestic demand for the initial months of the new season, when new crop sugar is not easily available in the market. Cane crushing will commence in November or December.
In the 2019-20 marketing season, the country's domestic sales were estimated at 25.7 million mt and exports pegged at 5.65 million mt.
India, the world's No. 1 sugar consumer, has been witnessing improvement in domestic demand with the easing of lockdown restrictions to contain the spread of COVID-19 since May.
The improved production outlook in states like Maharashtra and Karnataka will potentially encourage higher sugar exports from India, with ISMA projecting Indian exports at around 6 million mt of the surplus sugar in the 2020/21 season.
Higher production was viewed by trade sources as an opportunity for India to export sugar to Asia, as exports from Thailand are set to fall in 2020-21.
S&P Global Platts Analytics estimates Thai sugar production for the October 2020-September 2021 season at 7.91 million mt, down 7.87% year on year.
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