New Delhi: Sugar output could fall by three million tonnes to 23 million tonnes (MT) in the 2012-13 marketing year starting October on account of poor rains, but supply would be enough to meet demand, Food Minister K V Thomas said.
The annual domestic demand of sugar is about 22 MT. Sugar production in the ongoing 2011-12 marketing year (October- September) would be little over 26 MT.
"My personal feeling is that sugar production in 2012-13 could be 23 million tonnes. Even some section of industry is estimating production to be at this level," Thomas said.
"I do not worry about availability as production would be more than the demand. We will not require to import. But the only thing is the country may not have surplus sugar for export like we have in the current year," he said.
In May, sugar exports were freed and put under the Open General Licence (OGL). Prior to that the government had allowed two million tonne exports for the 2011-12 marketing year.
About 1.35 MT of sugar have been shipped in the first six months of the current marketing year.
For the entire 2011-12 marketing year, Indian Sugar Mills Association (ISMA) has estimated total exports at 3.5 MT against 2.8 MT in the previous year.
At present, export of sugar has become less lucrative due to a sudden rally in domestic prices on apprehension about production drop in the next year. Global prices are ruling lower than the domestic rates at present.
Sugar production in the next marketing year is expected to decline as a result of likely fall in sugarcane productivity, especially in Maharashtra and Karnataka, due to drought-like situation. Monsoon is deficient by 15 percent so far.
Thomas' projection of 23 MT of sugar production is much lower than ISMA's initial forecast of 25 MT for the 2012-13 marketing year.
Leading sugar-refiner Shree Renuka Sugars has pegged sugar output between 23.5 MT and 24.5 MT for the next year on account of poor rains in some states.