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  • India has produced 7.8m tonnes of sugar so far; 30% lower year-on-year (YoY).
  • In Maharashtra; 25% of mills have yet to start crushing.
  • We expect a 4.5m tonne reduction in total production this season as a result of poor weather and ethanol diversion.

Maharashtra: 25% of MH Mills have not started crushing

  • Maharashtra has produced 1.65m tonnes compared to 4.4m tonnes last year; 62% lower YoY.
  • We do expect MH production to disappoint this season.
  • Dry weather seen in the first half of the year had caused reservoirs to dry out.
  • Crop irrigation was affected, and low availability of cattle fodder resulted in early cane harvested for fodder purposes.
  • However, strong monsoon rains later on, have resulted in flooding in some cane areas and caused further problems.
  • This has delayed the crush start for majority of the MH mills compared to the past two seasons.
  • Only 137 mills are operating compared to 184 mills this time last year.
  • We are continuing to monitor the crush pace in MH.
  • The next two weeks will give a hint if MH production would start to tail off as seen in 16/17 season where tailing off was seen as early as December due to poor monsoon rains affecting cane agriculture and sucrose yields.
  • On the flip side, there is a possibility that balance 50 mills yet to start crushing could allow production to catch up and reach our estimates.

Uttar Pradesh: On Course for a Record

  • Uttar Pradesh has produced 3.3m tonnes compared to 2.9m tonnes last year; 16% higher YoY.
  • We think Uttar Pradesh will produce a record 12.7m tonnes of crop this season, compared to the 12.1m tonnes last season.
  • Sufficient water availability from the river Ganges means UP doesn’t rely on rainfall as much as other Indian states.
  • On top of this, increased plantings of high yielding cane varieties has boosted agricultural yields.
  • We think this will account for an increase in 600k tonnes of sugar production overall.

Karnataka: Dry Weather to Impact Production

  • Karnataka has produced 1.6m tonnes compared to 2m tonnes last year; 20% lower YoY.
  • We think Karnataka will produce 3.6m tonnes of sugar this season, compared to the 4.3m tonnes last season.
  • The prolonged dry spell that impacted Maharashtra also affected Karnataka’s major cane regions.
  • Production is likely to fall as a result of poorer agricultural and sucrose yields.

Czarnikow’s 2019/20 India Estimates