• India’s monsoon rainfall continues at a strong pace.
  • Rainfall is above average in all of India’s key cane growing regions, apart from Uttar Pradesh.
  • India is still on track to produce 32.5m tonnes of sugar in 2020/21, just 500k tonnes shy of the record.

The Monsoon Progresses Well

  • The monsoon rains continue at a very strong level.
  • Rainfall is above average in Tamil Nadu (35%) Maharashtra (16%) and Karnataka (15%).
  • With this, we think Maharashtra and Karnataka will collectively produce 15m tonnes of sugar and Tamil Nadu will produce 780k tonnes of sugar next season.
  • However, monsoon rains have been 10% below average in Uttar Pradesh (UP).
  • This is not overly concerning though because the perennial rivers supply UP’s cane fields with irrigation all year round, meaning the monsoon rains are not the main factor sustaining cane growth.

Indian Reservoir Levels

  • Maharashtra’s reservoir levels are still at their highest level in seven years.
  • Heavy rains in Karnataka also mean that the reservoirs there are 80% full.
  • This bodes well for agricultural and sucrose yields.

Where Does This Leave Sugar Production in 2020/21?

  • Weather conditions and water availability have been perfect for cane growth so far in 2020.
  • We therefore think India will produce 32.5m tonnes of sugar in 2020/21.
  • This is a 6m tonne increase year-on-year (YoY) and just 500k tonnes shy of the record.