Expectations of a record sugar production in Uttar Pradesh in 2013-14 following a bumper harvest have brightened prospects of sugar exports next year too despite the drop in production in Maharashtra and Karnataka where water shortage has hurt the crop. Indian exported around 3.5 million tonne sugar in the 2011-12 season.
In the current season, less than 5,000 tonne has been shipped till now due to low global prices. A high state-administered price and a better price realisation in comparison to rice are likely to prompt cane farmers in Uttar Pradesh to plant 10% more cane this year.

"Production may cross 8.5 million tonne in the 2013-14 season, up from 8 million tonne in the 2012-13 season. Area will go up by 10% from 24.3 lakh hectare in 2012-13," said S L Gupta, secretary, UP Sugar Mills Association. Record cane prices and good availability of seeds have diverted farmers to cane.

"Uttar Pradesh has raised the state advised price (SAP) for cane by Rs 40/quintal to Rs 280/quintal for the normal variety of cane, which is likely to get a better price realisation for farmers.

If weather remains normal, harvest will be bigger than last year. Farmers in central and eastern parts of the state have already brought more area under cane," he said. The likely surplus output in Uttar Pradesh may compensate the decline in production in Maharashtra and Karnataka, which are facing drought-like situation in some parts.

Agriculture minister Sharad Pawar has acknowledged that the 2013-14 sugar season will be dependent on the harvest in Uttar Pradesh. "There's less sugar cane planting in Maharashtra and Karnataka due to drought conditions and water shortage. Cane production in these two states may drop in 2013-14 but it's likely to be good in Uttar Pradesh if one is looking at the planting," he recently told ET.

The country produced 18.8 million tonne of sugar in the first five months of the ongoing 2012-13 season that started from October 2012, which is slightly lower than the year-ago period. According to Indian Sugar Mills Association, an industry body, Uttar Pradesh has produced 5.03 million tonne of sugar this year at a recovery rate of 8.95% when compared to 5.29 million tonne in the previous year.

"The gap in sugar production in the state has widened due to continuous cold and unseasonal rains last month, which hampered supplies to mills," ISMA said in a statement. Maharashtra has produced 6.53 million tonne, up from 6.5 million tonne a year ago while Karnataka has produced 3.05 million tonne, down by 3% from last year.