The country has received 21 per cent more rainfall than normal till now, according to the India Meteorological Department (IMD). IMD data shows the quantum of rainfall between June 1 and 22 stood at 126.1 mm, which is 21 per cent above normal from the benchmark of 103.8 mm arrived on the basis of a 50-year average.

By June 25, the southwest monsoon covered the whole of the country more than two weeks ahead of the normal schedule in a year that was forecast to see below-average rains. This is certainly bound to bring cheers to farmers of all kharif crops, including sugarcane. The rain god would certainly help sowing activities over the next few weeks. The Met department has predicted that rainfall over the country is likely to be 92 per cent of long period average (LPA) during July and 90 per cent of LPA during August. LPA is calculated on the basis of the average annual rainfall recorded between 1951 and 2000 (89 cm) during the June-September period.

India produces around 300-350 million tonne of sugarcane, 24-26 million tonne of white sugar and 6-8 million tonne of jaggery and khandsari a year. The sugar industry also produces about 2,700 million litres of alcohol, 2,300 mw power and multiple allied products. A recent Care Ratings report said India is expected to remain a major sugar producer globally and the industry is expected be a net exporter during the 2015-16 marketing year for the sixth sugar season (SS), which runs from October to September in a row.

This is notwithstanding the fact that the area under cane cultivation in India has dropped to 4.16 million hectares as of June 19 compared with 4.39 million hectares a year earlier, according to the Union agriculture ministry. According to estimates made by different sugar mills, exports reached 558,000 tonne from October to May. As farmers prepare to harvest the third-biggest crop ever, extending the country’s surplus for a sixth consecutive year, sugar exports from the country are set to double. In all likelihood, shipments will be 2 million tonne in the 12 months starting October 1, analysts say.

Indian sugar mills have already contracted exports of 50,000 tonne of white sugar to Sri Lanka, Myanmar, Afghanistan and Turkmenistan at $340-$345 a tonne. The cargoes are for July shipment. Sugar stocks are now expected to touch 10.3 million tonne as of October 1, when the new season starts, up 37 per cent from the previous year.

Sugar mills are getting increasingly interested in booking export orders. This can be attributed to falling prices in the domestic market, coupled with growing carry-forward stock. Last year, prices fell below the cost of production to a seven-year-low because of weak demand and mounting stockpiles, according to analysts and sugar industry officials.

The cabinet earlier this month approved interest-free loans of Rs 6,000 crore ($943 million) to help sugar mills clear Rs 21,000 crore dues to farmers. The government has also pledged a subsidy of Rs 4,000 per tonne for raw sugar exports as domestic rates have risen above global prices. Despite all these, sugar prices continue to fall.

Last week, sugar prices continued their bearish trend as a few producers sold the commodity at a discount on June 20 to ease stock burden amid limited demand. Mill-level prices dropped by Rs 20-40 a quintal, pulling down spot rates by Rs 20-30 a quintal. In futures trading, sugar prices fell by 0.73 per cent to Rs 2,169 per quintal in futures trading, as speculators trimmed positions, triggered by higher supplies from millers against low demand from bulk consumers.

Source:mydigitalfc.com