Triveni sees Maharashtra sugar risk lasting beyond 2026-27

Triveni Engineering said Maharashtra’s damaged 18-month cane crop, restricted planting water and potential seed-cane shortage could create two challenging sugar years beyond 2026-27. Management said raw-sugar import parity of about Rs 54.5 per kg delivered to Delhi, before margin, may limit domestic sugar prices even if supply remains tight.

Why does Triveni see Maharashtra sugar risk beyond 2026-27?

Triveni sees the immediate risk in Maharashtra’s 18-month sugarcane crop, which management said had been very poorly affected. The 2027-28 season in Maharashtra will therefore depend heavily on the 12-month crop, whose planting was due to start shortly after the H1FY27 call. Management’s concern is that the supply effect could extend beyond a single reduced crushing season.

The company said a short current year places seed-cane availability under pressure. Higher sugar prices may encourage cane crushing for sugar sales, but cane used as seed cannot also be crushed. Tarun Sawhney said crushing seed would “100%” affect the following year’s crop, making seed availability a direct constraint on 2027-28 production.

How could water shortages affect the next cane planting?

Triveni said irrigation is essential immediately after sugarcane planting because it supports germination. If Maharashtra farmers do not receive water while planting the 12-month crop, management expects serious effects on germination, productivity and crop health during the first stage of growth. It identified greater downside in Maharashtra than Karnataka, while saying similar factors also apply in Karnataka.

The distinction between the two crop cycles is central to the outlook. The affected 18-month crop has reduced the buffer for the next season, leaving 2027-28 more dependent on 12-month planting volumes and irrigation conditions. This is management’s conditional crop-risk assessment, not a formal production forecast by Triveni.

Could a seed shortage extend sugar tightness into a third year?

Triveni said two challenging years are logically possible in parts of central India, while current indications for a third year are slightly negative. A weak 2027-28 plant crop could reduce ratoon cane, or regrowth from an earlier planting, in the subsequent season. Management nevertheless said a view two to 2.5 years ahead carries many unknowns.

A recovery in planting remains possible if sugarcane economics become sufficiently rewarding for farmers. However, Triveni called seed material the crucial linkage because higher farmer returns cannot produce a large planting response without enough seed. The company therefore did not forecast a three-year shortage, but described a risk extending beyond the 2026-27 supply cycle.

Can Uttar Pradesh offset Maharashtra and Karnataka shortfalls?

Triveni said Uttar Pradesh is relatively better placed, although late rainfall has created uncertainty around cane maturity, early recovery, field access and the season’s start. State-level sampling indicated recovery was about 50 to 70 basis points lower year on year, where 100 basis points equal one percentage point. Management cautioned that field sampling is not the same as factory laboratory recovery data.

For Triveni, overall crop size remained unchanged across its eight factories and management expected yields to be broadly fine. Two factories showed a sharper impact in preliminary testing, six were broadly fine and one was better year on year in pol testing, a measure related to sucrose in cane. The company also said cane area allotted to it was higher by a high single-digit percentage from the previous year, without giving an exact figure.

Western Uttar Pradesh may face less lodging, or cane falling over, because farmers commonly bind the crop, according to management. Triveni said rainfall was also heavier in eastern than western Uttar Pradesh. Its operating response is to calibrate factories by cane quality, recovery and throughput, while factory laboratory results after several days of crushing are expected to provide a clearer assessment.

Triveni is also reducing exposure to the Co 238 cane variety because of red-rot disease risk. Co 238 represented less than 30% of group-wide cane supply, was virtually absent at its eastern Uttar Pradesh plant and was in single digits at central Uttar Pradesh plants. Management said the remaining concentration in western Uttar Pradesh was a concern and expected a major reduction in the upcoming planting schedule.

What could cap domestic sugar prices despite tight supply?

Triveni said domestic prices are likely to be tied to raw-sugar import prices while imports remain permitted. Management estimated raw-sugar import parity delivered to Delhi at about Rs 54.5 per kg before margin; adding roughly Rs 2.5 per kg of margin implied around Rs 57 per kg. It said institutional prices near Rs 58 per kg were about Rs 1 above that reference level.

The government had allowed imports of 1 million tonnes of raw sugar when the call took place. Management said raw sugar can be processed and sold domestically, while quota flexibility allows immediate sales rather than sales under monthly quotas. In its view, imported raw sugar is the national price reference until the approved import quantity is exhausted.

Management said it was almost certain that the Department of Food and Public Distribution would allow at least 2 million tonnes of sugar imports, primarily raw sugar, but this was management’s expectation rather than an announced decision. White-sugar import parity was higher, at around Rs 60 per kg on a breakeven basis. Management also cautioned that further government action on sugar pricing or sales could alter the market outcome.

Conclusion

Triveni’s assessment is that water at planting and seed availability could determine whether Maharashtra’s current crop damage becomes a multi-season sugar supply issue. Uttar Pradesh provides some counterweight through Triveni’s higher allotted cane area and broadly stable crop-size outlook across eight factories, but state sampling still indicated a 50-to-70-basis-point year-on-year recovery decline after late rainfall. Management sees import parity, rather than domestic supply alone, as the main near-term price reference.

The next indicators are factory laboratory recovery readings as Uttar Pradesh crushing progresses, the extent and irrigation conditions of Maharashtra’s 12-month planting, and any decision on the 1-million-tonne raw-sugar import allowance. Triveni also plans to reduce Co 238 in the upcoming planting cycle, while management said further government regulation of sugar prices or sales remains an unresolved factor.