Sugar mills in the country, the world’s second largest producer of the sweetener, have produced 278.48 lakh tonnes (lt) of sugar as on May 15 for the 2014-15 season (October-September), according to data released by Indian Sugar Mills Association (ISMA) here on Monday.

Despite the enormous output, production is not likely to cross the record 283.6 lt registered in 2006-07, said industry officials. The closing stock, however, is likely to be the highest in six years.

“It will be close to the 2006-07 figure but I don’t see it being crossed. Currently, there are 45 mills that are crushing cane and will produce about 50,000-60,000 tonnes. An additional 2 lt from the special season in Tamil Nadu will also be produced,” said Abinash Verma, Director-General, Indian Sugar Mills Association (ISMA).

Verma expected another 3-3.5 lt to be produced at most which would bring total output to around 282 lt. “Crushing operations have almost come to an end and most mills will close over the next 15 days,” he added.

“Closing stock at the end of the current season is estimated to be at a level of 103 lt, the highest in the last six sugar seasons,” said the ISMA statement.

Depressed prices Ex-mill prices continue to be depressed domestically at ₹24-25/kg in Uttar Pradesh and ₹22-23 in Maharashtra, the country’s two biggest sugar producing States. Cost of production is pegged at ₹35-36.

Globally, sugar was ruling at around 13 cents/pound on Monday, a price – which the industry said is not viable for exports. “Mills have exported only 4.6 lt till first week of May. Another 2-3 lt may get exported in the remaining period of the season,” the statement added.

Arrears situation Cane arrears have crossed ₹21,000 crore, say industry estimates, that is almost 35 per cent of total cane price payable this season. Acreage, however, is expected to remain at the same level with excess sugarcane likely to be available next season as well.

“It also means that either one out of three farmers have not got the payment or the farmer has not got payment for 35 per cent of his produce…this is the worst ever situation in the history of the Indian sugar sector,” the statement explained.

The industry reiterated the need for a rationalised pricing policy across the country given the mismatch between cane and sugar prices. Since mills were under legal compulsion to crush all the cane supplied, it has suggested that the government cover the arrears directly or buy out 30 lakh tonnes to improve domestic prices.

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