Sugar output plummets due to 2015 drought
Data revealed that India's sugarcane industry has yet to fully recover from the 2015 drought. The 2016-17 crushing season recorded the lowest output of sugar in 10 years. In 2016, the total sugarcane production stood at 4.5lakh metric tonnes, almost half of the previous year's 7.3 lakh metric tonnes. Estimates suggest that farmers made losses amounting to Rs. 6000 crore.
Sugarcane: A water intensive crop
Sugarcane is a highly profitable cash crop as it has multiple uses, from producing sugar to bio fuels. However, the crop is extremely water intensive. It requires 1500-2500 mm of rain and has a crop cycle of 18 months. Crops sown in 2015, are harvested in 2016. In addition, the process of refining sugar from the cane is also an extremely water intensive process.
India and sugarcane
India has the largest area under cultivation for sugarcane in the world. India is also the second largest producer of sugarcane in the world. In India, Uttar Pradesh and Maharashtra are the largest sugarcane producing states. Maharashtra has the highest number of sugar mills in the country. These are located in the often drought-hit Marathwada region.
India's massive drought
The Indian government told the Supreme Court that at least 330 million people across 256 districts were affected by the drought in 2015-16. Maharashtra was worst affected, so much so that cricket matches scheduled in the state had to be relocated due to shortage of water for maintaining cricket pitches. Farmers were the worst affected community by the drought.
Mills shut as output plummets
The drought caused the area under cultivation of sugarcane to drop to 6.3 lakh hectares in 2015-16 from 10.3 lakh hectares in 2014-15. Of 178 sugar factories active last year, 31 did not start operations this year and 120 shut by January 2017 due to lack of raw materials. These factors are expected to create a rise in the retail prices of sugar.
Sugar industry asks to restructure loans
The Sugar industry accrued cumulative losses worth Rs. 2500 crore. They have asked the Centre to restructure term loans worth Rs. 6,500 crore for 10 years. They want a moratorium of 3 years and 7 years for repayment of the loan.
